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[July 11, 2014]
Cellular providers block 'free' call apps in Caribbean angering consumers [The Miami Herald :: ]
(Miami Herald (FL) Via Acquire Media NewsEdge) July 11--At least once a day, Roxane Ledan chatted with her daughter at college in Canada using free call- and video-conferencing applications on her cell phone. Three weeks ago, the connection went dead.
Several phone calls later, Ledan, a social and cultural photographer in Haiti, discovered why: telecom giant Digicel had shut her down. She is now caught in a "parasitic" war between Digicel and companies that operate the popular apps.
"I feel like I have been deprived without warning or explanation," said Ledan, a frequent user of Tango and Viber, two of the Voice Over Internet Protocol (VoIP) applications that allow users to send text messages or make calls to other customers worldwide for free. "This is my only daughter and being able to speak to her and see her is my breath of air every day." For weeks, Digicel, the company that revolutionized cellular service throughout the Caribbean, has been clamping down on digital use of its network by blocking what it says are unlicensed applications that use telephone numbers assigned to its millions of customers.
"Unlicensed VoIP operators like Viber and Nimbuzz use telecoms networks to deliver their services, but they do not pay any money for the privilege," Digicel said in a statement. "This unauthorized activity puts enormous pressures on bandwidth -- which means customers' data usage experience is negatively impacted as a result. As such, Digicel has been forced to take firm action to prevent this parasitic activity." Digicel's strike against the operators began last month in Haiti where the company has a little more than 4 million customers. Of those, about 200,000 users use downloaded VoIP applications at least once a month, Digicel Haiti CEO Maarten Boute said.
"About 20 percent of these 200,000 are heavy users," Boute said. "The applications are VoIP apps only -- Magic Jack, Google Talk, Viber, Tango, FaceTime." Customers in Haiti were soon joined by those in Jamaica, where mobile competitor LIME has also banned the use of Viber on its network; then Suriname and Trinidad. And with the move has come a wave of growing backlash from consumers, politicians and technology gurus.
After the Telecommunications Authority of Trinidad and Tobago announced it was investigating consumer complaints of VoIP blocking by Digicel, the company Wednesday informed "valued customers" via its Facebook page that it was "pleased to resume all VoIP based products while TATT is engaged in investigating the negative impact of unlicensed providers and the adverse impact they have on infrastructure based investment in Trinidad and Tobago." Telecom industry analysts and watchers say Digicel's move is motivated by falling revenues and voice traffic as consumers increasingly look for ways to bypass costly calling rates. Worldwide, mobile operators are fighting back. They include O2 in the United Kingdom, Vodafone in Germany, T-Mobile in Germany, and Docomo in Japan, Digicel points out.
In the Caribbean, customers and technology groups have taken to social media, blogs and radio to lash out. In Haiti, four tech-savvy consumers launched an Internet petition that has garnered 1,112 signatures as of Wednesday. They have also issued a 10-page argument challenging Digicel's decision on legal and technical grounds, saying only Haiti's regulatory agency, CONATEL, can block such services.
"If customers are important to Digicel, explain how we can wake up one morning without prior warning to the customer, and see that all applications on our phones do not work?" they asked.
The head of CONATEL did not reply to a Miami Herald email seeking comment.
In Jamaica, as in Trinidad, regulators have responded by announcing plans to meet with customers and mobile providers. Even still, Digicel said more of its markets could face similar blockage while LIME said it's reviewing instances of bypassing on its network.
"This is simply about getting the VoIP providers to pay a fair price for the services that they are currently taking from us for free," said Gillian Power, a spokeswoman for Digicel Group. "Digicel has invested billions in its network infrastructure across all its markets and will continue to do so. In contrast, VoIP providers seek to use and benefit from that investment without making any local investment of their own." Boute, the Haiti CEO, said the blockage will remain until "an acceptable technical and commercial solution is reached." "Discussions are progressing well with certain of the VoIP providers and we expect a resolution to this situation within the next 5 calendar days," he said. "It is not about profits. It is about fairness." Consumers and telecom industry analysts aren't buying it.
"There is real money involved and the voice providers are not always part of that arrangement," said Roger Entner, lead telecom analyst with Recon Analytics.
Entner said what's driving the decision are the lucrative termination fees Digicel and other carriers are losing out on with every phone calls that goes over the Internet.
"The carrier is completely being cut out because it's a voice to voice call and it runs over the data network of both carriers. That is threatening these carriers," Entner said. "How they are diagnosing the problem, I agree with it. I don't necessarily agree with their solution to the problem.
"The solution is to have a usage based data offer where it doesn't make a difference if you are making the call on a circuit switch network or data network," he said.
Entner and others liken Digicel's move to U.S. carrier AT&T when it initially banned Apple's FaceTime video chatting service over its network, complaining that it was putting too much pressure on its bandwidth. The company later reversed its position in the face of public outcry.
"If you are dependent for your survival on call termination, there is something fundamentally wrong with your business model," Entner said. "This is partially the carriers' own fault by putting their customers over a barrel ... consumers are simply doing what you would expect them to do, which is to find the best deal." Gordon Swaby, an up-and-coming tech star in Jamaica, said a dangerous precedent is being set and opposes VoIP operators paying Digicel or any other mobile operator to be able to exist.
"All data should be treated equal, and voice is data," Swaby said by telephone from Kingston. "None should take priority over another; whether I go on Facebook, YouTube, all should be treated the same. " Still, the issue is a contentious one with different cellular providers taking opposing views. For instance, the Telecommunications Services of Trinidad and Tobago, which operates as bmobile, said VoIP "is an inescapable feature of modern telecommunications." "bmobile's policy on the matter as far as use of VoIP on its mobile network is concerned is that ... customers pay a subscription fee for this access and once customers have bought data services from bmobile, customers determine how they wish to use their data," the company said in a statement. "VoIP essentially is data on the mobile network much like email, YouTube, social media or downloading apps and games." Andrew Wheatley, Jamaica's opposition spokesman on Information and Communication Technology, said blocking the apps is a move "in the wrong direction" especially in a country trying to encourage technological innovation.
"It stifles innovation. It stifles growth and it stifles entrepreneurship," he said, adding that he was surprised that Digicel would go this route. "The Jamaican consumer over the years has contributed greatly to the expansion and development of Digicel; not only in Jamaica but with our worldwide brand." Both Wheatley and Swaby have called on Jamaica's government to step in, and strengthen laws governing telecom to prevent the blockage.
Power, the Digicel spokeswoman, said Digicel is able to block the providers because "companies are required to hold a license to deliver international voice traffic into a country, irrespective of the technology used. ?The companies that Digicel has blocked do not hold these licenses. As such, Digicel is within its rights to block them." And while Digicel has declined to provide the names of providers it is negoitiating with, Viber CEO Talmon Marco told Trinidad's C News via video conferencing that Viber does have an agreement with Digicel, and did not violate the company's terms.
"I think we got a note from them sometime ago, I am not sure, I don't have the details, asking us to pay them millions of dollars. We didn't take it too seriously," he said. "They somehow said 'let's try and figure out how many free phone calls people make in Jamaica. They came up with a number, they multiplied it, I guess by the rate we were supposed to pay them for calls to Digicel and then they said okay, you owe us $4.7 million." Calling the blockage a form of censorship, Talmon told customers this week that it plans to bypass the block.
"Users should make sure they have the latest version of Viber installed so that they are best able to use the app. Viber will continue to operate as usual in light of these current developments," he said.
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