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Beyond OTT And WhatsApp, The Real Threat

When Clayton Christensen published his classic, The Innovator's Dilemma, he brought to our understanding how great companies can be disrupted by smaller more agile firms.

Over The Top (OTT) solutions like WhatsApp have been a concern to telecommunication companies like MTN, Glo and Airtel. But while these companies are looking at OTT, a huge challenge may be coming from Facebook and Microsoft. Microsoft has been building capabilities on TV whitespaces.

MainOne and Tizeti today announced the completion of a joint development project with Facebook to enable the expansion of internet services in Lagos. This partnership will leverage MainOne’s fiber connectivity, Tizeti’s twenty brand-new solar-powered towers, and Facebook’s Express Wi-Fi. As a result of this project, internet services will be more accessible across Lagos Mainland.

As Tizeti/Facebook operation expands, some telco customers will move to their ecosystems. Think of a scenario where Tizeti/Facebook partnership scales to all the major cities in Nigeria. Depending on the cost, you may see the telcos struggle on keeping their broadband customers.

Tizeti has built and will operate the solar-powered Wi-Fi Towers across Lagos while MainOne will provide multiple Gbps internet bandwidth to the outdoor towers via a mix of fiber-optic and microwave backhaul connections. This internet service will be delivered to end users via Wi-Fi, including via Express Wi-Fi hotspots deployed by Tizeti in Lagos.

Besides managing the OTT revenue loss, the telcos must deal with some of these evolving partnerships as they will continue to grow. If they do not pay attention, they could regret it. At least with OTT, they do get small revenue. Here, there is a complete substitution which could be consequential.

Let's see how it plays out. We are watching!