MTN takes aim at 'free loading' WhatsApp - TechCentral

MTN takes aim at ‘free loading’ WhatsApp

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Mobile operator MTN has fired a shot at popular chat application WhatsApp.

The operator fumed at the popularity of chat over-the-top (OTT) operators.

“You have these players which are getting huge benefit out of an industry without making any investment. How do we level the playing fields?” MTN South Africa CEO Mteto Nyati said.

Facebook-owned WhatsApp has grown in popularity in South Africa, replacing Mxit and BlackBerry Messenger as the most popular chat application on smartphones.

Market tracker App Annie reveals that WhatsApp is the top downloaded application in South Africa, followed by Facebook Messenger, Facebook and Instagram.

“What have these over-the-top players invested in South Africa? Zero,” said Nyati.

MTN will have invested R10bn into its network by the end of 2015.

Nyati called for the Independent Communication Authority of South Africa to investigate OTT providers.

“Where we would like the regulator to be playing is making sure the playing fields are level between us, the network operators and the over the top players.”

Despite repeated efforts to contact Icasa for comment, officials from the regulator were unable to comment on whether they would conduct an investigation.

Facebook revealed that it was showing significant growth in its three key African markets: South Africa, Kenya and Nigeria.

There are 7,3m daily active users in South Africa, but almost all of them (7m) visit Facebook on a daily basis from mobile devices.

The giant social network reported revenue of US$4bn in the second quarter, up from $2,9bn in the same period in 2014. WhatsApp had revenue of $15m.

Twitter posted revenue growth of 61% to $502,4m in the second quarter of 2015, but that still translated to a loss of $136,7m.

“You have to regulate them because clearly they’re making a huge amount of revenue on top of the infrastructure that the operators have paid for. Somehow they have to contribute towards the building of this infrastructure,” Nyati argued.

A typical SMS in South Africa costs around 80c for less than 50kB of data, while lower-end data bundles cost between 25c and 60c/MB. According to the GSM Association, eemails cost between 10kB and 50kB in data.

Nyati rejected a suggestion that zero-rated SMS would convince people to abandon OTT chat providers.

“Even if you make SMS zero, it doesn’t mean that people will stop using the other one.

“My view is that those services have been designed in such a way so they are so customer friendly. The fact that they end up being zero-rated is a different matter, but if you look at the uptake of WhatsApp, it’s so easy for the customer,” he added.

Nyati hinted that he is open to negotiations with OTT providers on how they could contribute to the network.

“We need to find a way of working with those players because they are providing services that our customers are looking for. We just need have an arrangement that is beneficial for both parties.”  — Fin24

20 Comments

  1. Greg Mahlknecht on

    Oh man, another idiot running the show at MTN. For about 15 minutes since the “CEO Promises a more caring MTN” article we thought he was different. But no.

    Who pays for those services and that infrastructure, Mr. Nyati? Your customers, genius. You sell them data, they pay for it; it’s none of your concern what they do with it. By definition the entire internet are OTT services. Without OTT services you wouldn’t sell ANY data.

    Asking ICASA to “investigate OTT providers” shows a profound lack of understanding how the internet and the industry works, and it should make the MTN stakeholders very very worried.

    Your industry is transitioning from a high-profit-margin one to a low-profit-margin one. Deal with it.

  2. “My view is that those services have been designed in such a way so they are so customer friendly. The fact that they end up being zero-rated is a different matter, but if you look at the uptake of WhatsApp, it’s so easy for the customer,” he added.

    Is this not at the hart of customer satisfaction, halloooo!! At least Cell C embraced this….

  3. MTN must be losing many customers to telkom.mobile.and cell.c. they have much better value for data bundles. MTN your business practices such as not allowing a customer the oportunity to leave a Voicemail message but rather you will conveniently send the. An sms notifying them of my call. I must then key in my number and verify an the notify if message is urgent or not. All the while it is costing me airtime. But then your customer whose side you are supposedly on has to then use their airtime to call me back. Perhaps allowing me to leave a Voicemail message would have meant they do not need to call me back. But you rip off your own customers. That’s why they are abandoning the MTN ship. Now in your greed for more money you want others like whattsapp and Google to pay because people are using your network. Where were you to fight for lower sms charges and lower call tariffs. At one time an sms was costing R2. Now is the time for you to actually manage and run your business along ethical and customer focused principles, and to earn your salary and bonuses. Don’t look to regulators to always protect your market share

  4. Hitting Thefan on

    So when I use Whatsapp I use data, which I purchase from my ISP be it Vodacom, MTN, Telkom or Cell C. So these OTT operators actually still makes us use the ISP’s. The only thing is that it keeps us away from exploitive products such as sms’s and this is what actually tick’s off some ISP’s. They want to milk till the end of time. Why not have OTT’s contribute to the consumer. Now that would be something.

  5. Andrew Fraser on

    I don’t understand. Customers are paying for the data, why shouldn’t they use it for whatsapp?

    The fact is that SMS is stupidly priced, and messaging apps took the opportunity. It’s too late to cry about it now. The MNOs tried to wring every last drop of profit out of a service and were sidestepped by more nimble players that gave customers the service that they wanted.

  6. Dante Daniel Campbell on

    How about you (MTN) make your service better than a drunk teen at a football match, then perhaps someone may give a damn about it.

  7. Ah stating the obvious. Pity the networks don’t see that. And when I use Whatsapp on wifi they don’t have any input to my usage either. Selfish chops, they just trying to milk us for more money.

  8. Richard Wickens on

    Exactly, WE the subscribers are paying for the infrastructure. Do you expect that EVERY website I visit must now give YOU money? Also why the hell do data bundles expire? It’s not a carton of milk! And to top it off you entice your subscribers to buy larger data bundles because it’s cheaper knowing damn well that if it’s not used up by the time it expires you get to pocket money for a service you did not render. That is theft! If I sold you a car tire and then after a month came back and took the tires away regardless of the amount of wear and tear on the tire, I would end up in court in a flash. ICASA should do an investigation, of YOU and all the other service providers stealing money from your subscribers.

  9. Well, poor direction like this will simply lead more MTN customers to providers who embrace the times rather than fight them… or greedily try to exploit them. Fail, Mr Nyati.

  10. There is a very big conflict of interest here. Why am I paying for data if Whatsapp is to be charged for that same data as well? Is it not enough that I pay for my data and use it for whatsapp, skype or telegram as I see fit? This is a net neutrality issue. This OTT crap is nonsense. Its just another way that MTN wants to charge for services at both ends of the pipe!

  11. Run your business properly and you won’t need to lobby the regulator for protection Mteto. How about trying to out innovate them? Or acknowledging that the OTT providers bring huge data traffic (and revenue) benefits to your business? At the end of the day, a telco is meant to be a dumb pipe that earns cost of capital – you are not meant to enjoy 60% ROEs like you and VOD have done in your oligopoly for the past 15 years. Get rid of this protectionist attitude, it is not productive in society.

  12. The Emperor has no clothes... on

    The execs at MTN have very short memories. In April 2013 MTN decided that LTE was a VAS service and would attract a R39/month charge before you had even used any data , which would obviously be charged at normal rates and consumed several times faster than before. At least they woke up to how stupid this would have been but it seems that parts of history may be about to repeat themselves.

  13. WOW! Very well put Greg. And you are 100% correct, I pay my provider (not MTN – yay) exorbitant amounts to be able to use WhatsApp. F O MTN.

  14. I understand the argument. The problem is WhatsApp’s Voice Over IP (VoIP) was probably not seen coming.

    MTN et al’s pricing model for data was set to be a fixed rate irrespective of the quality/speed (infrastructure dependent) provided i.e. same price irrespective of LTE, 3G, 2G Edge. WhatsApp’s (or any) VoIP only works effectively over an LTE connection … but the likes of MTN do not get the “return on investment” for investing in LTE infrastructure because their pricing model was not designed with WhatsApp VoIP in mind.

    It is possible to charge for data based on the protocol running over it which is probably a last resort. The rumblings from MTN etc are likely a precursor to this.

  15. Andrew Fraser on

    Actually, VOIP works just fine over 3G.

    If the telcos start to charge different rates depending on protocol, the apps will just mutate to tunnel the data through a VPN.

  16. KoasConverter on

    What does this dude know about modern communications anyways, sounds like an idiot crying

  17. humm … this sounds oddly familiar, pay a large amount of your hard earned salary towards building our awesome roads (and then some), and then getting charged to actually use it. It is the de facto government mentality which is prevalent. Meanwhile, back at the ranch (SANRAL, Government/MTN/…), your money is being squandered on lavish lifestyles!

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