Vodacom wants WhatsApp regulated - TechCentral

Vodacom wants WhatsApp regulated

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South Africa’s biggest mobile network Vodacom wants a regulatory approach to data-driven over-the-top (OTT) applications such as Facebook-owned WhatsApp.

WhatsApp has grown to over 10m users in South Africa, according to research from World Wide Worx and Fuseware.

And Vodacom, in its interim results announcement on Monday, said that it has experienced a 33,5% data growth rate but that the company had invested R6,2bn in South Africa to cater for greater Internet usage. This follows a R5,8bn investment in 2014.

“A lot of your data growth is driven by the same people who are trying to cannibalise you,” Shameel Joosub, Vodacom CEO Shameel Joosub said in an earnings call on Monday.

Joosub’s view echoes that of MTN South Africa CEO Mteto Nyati in a recent interview.

“You have these players which are getting huge benefit out of an industry without making any investment,” said Nyati.

Joosub went on to call for OTT operators to face greater scrutiny.

“It needs to be carefully considered from a regulatory perspective — there should be some rules and regulations around it.”

However, communications regulator Icasa is not currently engaged in investigations into OTT players.

“The authority has noted comments made around the regulation of OTT services. However, the issue is not in the authority’s 2015-2016 plan. The matter may be identified or looked into as a priority for the next financial year as we are currently finalising the plan,” said Icasa spokesman Paseka Maleka.

Joosub said that the load that OTT providers place on the network could have an impact of the reduction of pricing for data services.

“It will affect the price of data coming down – or the rate of data coming down.”  — Fin24

22 Comments

  1. Andrew Fraser on

    So, exactly what can I use my data connection for, Shameel? If I open a website, should the owners of that website be paying you for the privilege? If I watch a video, should Showmax pay you? If I check out some directions on my phone, should Google pay you for supplying a map? Or does it only apply to services that compete for your archaic and overpriced services like voice calls and SMS?

    A sign of a business in decline is the overbearing attempt to protect existing revenue streams and not innovation to capture new ones.

    Oh, and it isn’t Whatsapp that is slowing the reduction in data costs… that is just because of your duopoly with MTN. Neither will drop prices for data before they are absolutely forced to in a competitive market. Bring on Telkom’s purchase of Cell C..

  2. How is this even a thing? The rollout of actual services (Whatsapp, Facebook, and the rest of the internet) is what is driving their massive data growth. Charge for the data on what it costs you to deliver it and that will drive the competition. It’s only because we’re being ripped off with the traditional lock-in services like SMS and voice. Block Whatsapp and everyone will move to Messenger or Telegram. It is impossible to regulate what data services your customers may or may not use.

    They’re going to need much better reason than that.

  3. I will get a lot of angry comments but I don’t think Shameel is going down the wrong road in saying there should be some sort of regulation for whatsapp.

    Corruption and inefficiency aside, regulation actually helps protect the consumer and gives some rules for play that are currently non-existent. What about legal recourse for if Whatsapp/Facebook etc give your details to US or other intelligence services? I hate how they glibly say “agree to following Terms” for new app download and you have no choice but to agree, even if invasive or undesirable.

    Networks need to make peace with the fact that they cannot participate in the financial interaction or benefit between OTT players and consumers but asking for them to have the same regulatory obligations is a sensible way to go as it helps level some of the playing field and I don’t think that global companies and services should have the right to have a massive presence without some recourse for local consumers.

  4. Vusumuzi Sibiya on

    >>Joosub’s view echoes that of MTN South Africa CEO Mteto Nyati in a recent interview.

    >>“You have these players which are getting huge benefit out of an industry without making any investment,” said Nyati.

    Seems like whenever a dumb-pipe is going to speak up on this matter, one should only expect a nonsensical utterance of gobbledygook…

    …I would have to say that this is a topic where both Vodacom and MTN should cherish being dumb, in the manner that we would expect a dumb-pipe to be.

  5. If it eats into your revenue stream, regulate the tripe out of it – especially the revenue stream in which you are fleecing the consumer.

    The part that is most counter-intuitive in this ludicrous plea, is that Vodacom’s half year results are exceptionally good.

  6. My good missus made her first international call using this dastardly OTT last week. Quality of the call was said to be no different to any other means of voice call. Why use the said OTT? Cost. Convenience.

    So long as Vodacom and other operators keep the prices artificially high, consumers will continue to look for alternate means to fulfil their needs.

  7. I suspect he is really upset because Cell C allow unlimited Whatsapp usage for R5 a month. This will no doubt churn customers. A bit like when Vodacom offered those Blackberry “free internet” bundles to students. Ironic really.

  8. Who sets those rules? Why should our regulator have our interests at heart any more than the government of other countries. If you’re concerned about privacy take action for yourself, why is it the government’s role?

    Ironically your best chance of maintaining privacy is to use an unregulated OTT service like Signal.

  9. Actually the messaging apps will just morph to use VPN tunneling technology. There’ll be no way to block them.

  10. William Stucke on

    > What about legal recourse for if Whatsapp/Facebook etc give your details to US or other intelligence services?
    That, Ryan, is a completely different subject to what’s being discussed in this article. Yes, I agree that the consumer is being fleeced by “shrink-wrap” agreements and the US’s cavalier attitude towards the rights of citizens of their own and other countries. That matter is being attended to by the courts in several countries. Please discuss it under a different thread / article, not here 😉
    The subject of THIS discussion is Net Neutrality and the utter failure by large slow moving Telco’s to THANK the so-called “OTT” players for giving their customers a reason to pay for data. My good friend Shameel wants to be paid TWICE. I’m already paying for data to use WhatsApp, Facebook, Google, etc. Wanting to be paid twice is simply greed.

  11. Careful there! CellC is charging for Whatsapp now. Telkom will take advantage of this fact.

  12. William Stucke on

    > “A lot of your data growth is driven by the same people who are trying to CANNIBALISE you,” Shameel Joosub, Vodacom CEO Shameel Joosub said in an earnings call on Monday. [Emphasis added]

    “You have these players which are getting huge benefit out of an industry WITHOUT MAKING ANY investment,” said Nyati. [Emphasis added]

    Here we have two CEOs of two very large and respected companies either demonstrating their ignorance, or demonstrating their willingness to overlook the facts in order to support their claims for excessive profits. Either way, they are deliberately using emotive language. Is this to obfuscate?

    The FACTS: Facebook spent USD1,831 million on capital expenditure. Specifically, on ” $1.83 billion for capital expenditures related to network infrastructure and the construction of data centers and office buildings”. See Facebook 2015 Annual Report

    On the other hand, in their 2015 annual report, issued 2 months later, Vodacom Group incurred capital expenditure of ZAR13,305 million. As for MTN Group, only their 2014 AR seems to be online. Their capital expenditure was R25,242 million

    Whether it’s R10/$ or R14/$, USD1,831 million isn’t “nothing”!

    Taking a median value of say R12/$, Facebook spent R22 billion in capital. Right up there with in the same ballpark with MTN (R25bn) and Vodacom’s global operations (R13bn). Oh, yes, Facebook / WhatsApp has a winning value proposition to the customer, as opposed to the MNOs who are perceived as overpriced.

  13. I’m not worried about paying for data to use Whatsapp or Skype, I just don’t think that that data should have any greater cost than web traffic.

  14. So Vodacom is crying because they do not get to exploit their customers as badly as before? Now they are campaigning for regulatory protection? This business is becoming a joke.

  15. These players not making any investment are the reason Vodacom and MTN gets to sell overpriced handsets. If it was not for these “takers” the providers would not be able to sell smartphones so widely, so they OTTs are the very reason for the existence of the industry.

    Its like saying petrol or cars are not investing in the roads industry.

  16. How is it that the whole world is able to provide the service and make profit and vodacom is off crying in the corner.

  17. What you have is a dying industry asking for government protection instead of adapting to the change. Maybe Vodacom and MTN should be fined for their price fixing endeavours.

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