Here’s an adventure I am going to enjoy watching. Last year, South Africa’s two largest Mobile Networks, Vodacom and MTN, called for regulation of OTT services in South Africa. Hearings with Parliament’s Portfolio Committee on Telecommunications and Postal Services have been scheduled for 26 January. According to Times Live:
OTT (Over-the-top services) range from WhatsApp to Skype and Google Hangouts, and allow users to make messages and calls over data networks – often at comparatively lower costs than traditional telephone calls or SMS.
I’m interested for two reasons…. because, in my opinion, they’re picking a fight that impacts over 10 million South Africans. Done badly things could go horribly wrong for them. And secondly, they’re bringing an old school mentality to a new school world.
The 10 Million People Fight
Firstly lets be very clear about why there has been a call for regulation from these two giants of South African telecommunications in the first place? Whatever you hear, in my opinion, it’s all about money. And don’t you believe anything else (the spin doctors are coming). As these OTT services have evolved they’ve slowly begun to steal away from the revenue streams that Vodacom and MTN have relied on for their massive turnovers and always increasing profits.
Think about your own Christmas and New Year. Several years ago you would have received all your messages on SMS (at up to R1 per message)? This year, I bet they were all delivered via Whatsapp, WeChat or something similar? These communication giants have profited handsomely from SMS over the years, and suddenly it’s mostly dried up.
Whatsapp (I’m using them simply because they’re so ubiquitous) has now added voice, and voice message. Essentially they’re offering you everything these two Giants (Vodacom and MTN) offer us, at a cheaper rate than what they do, because it’s data based and data is charged out cheaper than voice. Hence over-the-top services. They’re offering services on top of Vodacom and MTN’s network,
I smile at this because when these services, like Whatsapp, first came out, and were just messaging, we didn’t hear anything from Vodacom and MTN. They were happy to see their data revenue increasing on the back of messaging and photo sharing. Now that voice has been added, there’s a little more panic, it seems, going on 🙂
I predict we’re going to hear Vodacom and MTN use all sorts of excuses as to why they want these OTT services regulated, and very seldom if at all, will you hear them saying it’s because they want more revenue and want more profit. This of course will make them look greedy, and so their spin doctors will suggest it’s because we, as South Africans need protection from the unscrupulous practices of the global software giants like Google, Facebook and Microsoft, et al. They will invent all sorts of reasons on our behalf (without having asked us, and without us having asked them) as to why, ultimately, the outcome should include them being paid more money. Vodacom and MTN are going to describe themselves as Citizen Caring Conglomerates who only have the best intentions for we the people of South Africa.
Oh wait, it’s already happening. In a post on MyBroadband, MTN spokesperson, Chris Maroleng suggests that this is about creating South African jobs and increasing South Africa’s tax revenue (oh MTN you’re such a wonderful corporate citizen):
“Competitors who do not create jobs in this country, who do not pay taxes in South Africa, [and] do not invest in the infrastructure for these services to be provided must be held accountable.”
As I said up top, if they get this wrong, they’re going to get the attention of over 10 000 000 OTT loving South African Citizens.
Old Thinking In A New World
And secondly Vodacom and MTN are using an Old School thinking approach in a new world. Did they really not see this coming? Of course they did. Did they do anything about it? If anyone should have built an OTT service, it should have been them. OTT services have been predicted since the beginning of the internet. OTT services have existed since the beginning of the internet. OTT service are what keeps the internet going. If there were no OTT services there would be no internet.
They got to own the network, and they got to make a truck load of money out of it. Which they continue to do. Now that their revenues are being challenged, instead of innovating and creating, they’re trying to use their muscle to own the OTT services, or at least to own some revenue from them.
I have no respect for any company the size of either of these two giants who are, in my opinion, using their size to bully themselves into more money. There’s nothing clever or impressive about this particular road they’re walking down.
Don’t Lump All The Networks Into One Basket
And to be fair, Cell C has taken a completely different stand to Vodacom and MTN. From another post on MyBroadband:
Cell C said that regulating services like WhatsApp and Facebook would hurt the local telecoms industry. “We strongly believe that regulating OTT players could be to the detriment of the industry and consumer at large,” Cell C CEO Jose Dos Santos told Fin24. “Contrary to our competitors, Cell C has been embracing the services offered by OTTs.” Cell C provides free access to Facebook and basic Internet services through Internet.org. The company also offers unlimited WhatsApp at R5 per month, said Dos Santos.