Why we're blocking Viber

Caribbean and Central American mobile operator Digicel has been surrounded by controversy after blocking access to the popular Israeli VoIP app Viber last month in Jamaica, Haiti and Trinidad and Tobago. The app has 300mn users worldwide and was bought in February by Japan's Rakuten for US$900mn.

Naturally, the decision hasn't been popular with Digicel customers and regulators in those markets are currently investigating the issue. In the case of Trinidad, Digicel agreed to restore access while the probe is being carried out.

Digicel's issue is with "number-based" voice apps, which it claims use the data networks of traditional operators to provide their services for free without paying taxes on calls. These apps, Digicel claims, contravene legislation in those markets in a much more blatant way than non-number based apps such as Skype.

BNamericas spoke to Digicel's director of international business Conor Clarke to find out more about why Digicel has chosen to pick a fight with this over-the-top (OTT) player which has gone unchallenged in many other markets.

BNamericas: Why did Digicel begin blocking access to voice apps like Viber and Skype?

Clarke: We haven't blocked Skype. We make a clear distinction between number-based and non-number based apps. Why? With a number-based app you sign up using your number, like WhatsApp. We have no problem with most of them. We pay huge license fees for those numbers that allow us to originate and terminate calls to them. Some of the governments rely on these license fees to survive, it is a huge issue for them. No fees are paid by voice apps.

The thing that spurred us into action was the announcement in July last year that they were going to take calls from fixed line PSTN operators and deliver them through to the app, thus not paying anything. So a fixed line subscriber with AT&T in Ohio would make a call, that call would get routed through the carrier market and then Viber would pick it up and deliver it through to their app if they could identify the number as one with their app installed.

That's blatant bypassing, which is criminally illegal in our markets. In Jamaica, bypass carries a two-year prison sentence. In Trinidad, contravention of the Telecommunications Act results in a five-year prison sentence plus a US$10,000 fine for every day of the breach.

So this is not just over-the-top (OTT), which we have no issue with whatsoever. If there weren't OTT players, people wouldn't use our data services.

But in Jamaica we pay US$0.095 of tax on every minute that comes into the country. Why would the calls from Viber to Viber not be subject to tax?

And Viber has asked us to pay them for access to their app. They've offered us cheap termination to numbers on their app but they require that we give them free access to our numbers.

BNamericas: So what is the difference with what Skype is doing?

Clarke: Number-based and non-number based apps. We do have concerns about both but very clearly one uses a number and it displays the number in precisely the same way the mobile operator does, that's where we believe it is bypassing.

BNamericas: So Skype is not doing that?

Clarke: No, Skype is different. You sign up with Skype with your email address, it's profoundly different. We are concerned but not in the same way and we haven't blocked them.

Any number-based apps will be liable to blocking. Blocking is a reaction, it is not our first shot. The reason we've blocked it is because of a lack of engagement from them. I've been talking to Viber since July last year. We signed an agreement in December.

BNamericas: So you did enter into negotiations with them?

Clarke: We sent them an invoice. We've asked them to negotiate repeatedly and they've given us no response, which has given us no option other than to block.

BNamericas: But do the VoIP providers you're ok with, like Skype, pay you some sort of a fee?

Clarke: Again, we do have a problem with those as well, it's just more blatant and obvious with a number-based app that they are in direct contravention of licensing laws. They don't pay tax like the rest of us do.

BNamericas: Digicel has blocked Viber in Haiti, Trinidad and Tobago and Jamaica. Are those the only markets where this is a problem?

Clarke: No, it's a problem in every market.

BNamericas: So this policy could be expanded to other markets?

Clarke: If it hasn't already been, yes.

BNamericas: How have operators in other markets dealt with this issue?

Clarke: It's blocked by Vodafone in the UK, T-Mobile in Germany and by various operators around the world. A lot of operators are now saying you have to pay a premium to access VoIP.

BNamericas: WhatsApp is number-based and is looking at introducing VoIP. What would be the impact of that?

Clarke: If WhatsApp were to introduce a VoIP service we would have exactly the same view as with Viber or any other, because I'm presuming they would use it as a number-based service.