OTT providers blast SA's mobile operators - TechCentral

OTT providers blast SA’s mobile operators


Global technology groups Microsoft, Google and Facebook strongly rebuffed arguments put forward by mobile operators on Tuesday that they do not pay taxes, did not provide their own infrastructure and were not worried about consumer service.

The companies hit back hard at mobile operators at a parliamentary meeting on Tuesday into whether so-called “over-the-top” services should be regulated in South Africa.

MTN and Vodacom have both argued that OTT providers need to be regulated in some way, if only to ensure that they are subjected to the same compliance rules as the networks. MTN went as far as to accuse the companies of not paying tax in South Africa.

Microsoft, Google and Facebook, all presenting at the parliamentary meeting, said the service they offered should not be seen as competing with those offered by the operators, but rather as revenue generators for them.

“We don’t get a free ride,” said Ebele Okobi, Facebook head of public policy for Africa. If anything, she said, the service offered by Facebook — it owns messaging service WhatsApp — generates revenue for operators.

She said from Facebook’s point view, it regards operators as partners with which it could develop a “symbiotic relationship”.

Okobi said telecoms providers and OTT companies operate in very different markets. Where carriers have high barrier to entries and have to deal with a lot of regulation, the opposite is true for OTT providers.

Google South Africa’s public policy manager, Fortune Mgwili-Sibanda, agreed. He suggested that instead of treating OTT providers like telecoms operators, operators should be treated like OTT providers. “Why go about putting the same cumbersome rules on new players?”

Mgwili-Sibanda went on to say that not only was it a myth that Google does not pay tax on the services it provides, it is willing to pay more tax if the tax review headed by Judge Dennis Davis changes the tax structure.

He said there is also no truth to the view that OTT providers do not build their own infrastructure.

He knocked the idea that OTT companies do not care much for customer service because the public is free to move to another provider with little effort.

For his part, Siyabonga Madyibi, representing Microsoft, does not see the point of the meeting called by parliament. He said that as there is not even a generally accepted definition of what OTT is, it could include services like dating sites and micro blogging site Twitter.

He warned that regulating OTT could come at high cost. Microsoft owns Internet voice services provider Skype. Madyibi said if it is forced to shut down, it would not impact Microsoft severely but would hurt the small business owners that depend on it.

From his point of view, the hearing only served one purpose: “We are here for one reason. To protect the revenue of mobile operators.”  — © 2016 NewsCentral Media


  1. >> “He warned that regulating OTT could come at high cost. Microsoft owns
    Internet voice services provider Skype. Madyibi said if it is forced to
    shut down, it would not impact Microsoft severely but would hurt the
    small business owners that depend on it.”

    This, so much of this. I’m pretty sure Skype makes very little profit in SA, but as a small company we use it daily to communicate.

  2. Greg Mahlknecht on

    It’s a little known fact that Skype international voice/video traffic accounts for more international communication than every single telco in the world combined. In so many countries, the telco’s have tried to fight the fight we’re fighting now … and lost. I guess we’re just behind the curve here. But the outcome is inevitable.

  3. Andrew Fraser on

    “From his point of view, the hearing only served one purpose: “We are here for one reason. To protect the revenue of mobile operators.””


  4. So I take it that MTN and Vodacom don’t charge for all the databits that get chewed up by the million every time anyone Skypes or WhatsApps? And what the heck has Facebook got to do with anything? What about emailing? How about Dropbox or Drive? And do banks get a “free ride” every time anyone uses infrastructure “owned” by a cellphone company to do Internet banking? This whole thing is just too absurd for words.

  5. Do the right thing on

    Microsoft, Google and Facebook it would be strategically beneficial to acquire these Telco’s now and save us the hassle of having to pay ridiculous data costs and having to deal with this crazy issue.

  6. Or start their own. I’m surprised that mobile virtual network operators (MVNO) haven’t started a revolution yet. Get Google to get their servers behind it and they can really give our dinosaur telcos like EmptyN and Vodascum a run for their money.

  7. Exactly. These hearings are not in the public interest, nor are they in consumer interest, nor are they in the interest of innovation. They are merely there for the telcos to wash their hands so they can pretend like it isn’t price collusion if and when ICASA regulates OTTs and they have to pass the additional costs on to the consumer.

  8. Hi Umkono. It’s your ISP talking. I noticed that I charged you for using my infrastructure. Thanks for footing the bill, but I also noticed that you are using an OTT to browse the internet. You know, your browser. Those browsers are really piggybacking on the ISPs infrastructure and people like Opera and Firefox really did not invest in the ISP’s infrastructure.

    Yeah, it doesn’t make sense to me either but that’s essentially Vodascum and EmptyN’s attempt at blaming OTTs for bringing them customers and now having to develop and maintain infrastructure that supports the habits of their customers.

  9. My daughter’s data was depleted yesterday afternoon (yes, we monitor her usage 24/7). She couldn’t understand why, especially as she has only sent a couple of WhatsApp messages. I took a look.

    She had received several photos from a friend taken of them at the school sports meeting that they were involved in. BOOM! There is was. Although the cost wasn’t great, it cost the person sending it and my daughter receiving it.

    And still the FAT and GREEDY Vodacom and MTN are not content? They continue to whine like stuck pigs demanding protection so that they can hold their ground in fleecing the consumer. Blithering pond scum!!!

  10. Exactly. Bit like a motor manufacturer wanting fuel companies to pay for their factories because they don’t “contribute” towards the cost of building the cars from which fuel companies make money. Absurd argument.

  11. In Vodacom’s results for the year ended 31 March 2015, they recorded 23.4% data revenue growth (from a 63% increase in data traffic). Vodacom should be applauding the OTT players whose services were responsible for this growth – particularly with respect to Vodacom’s outrageous charge for mobile data. Only one word to describe Vodacom – Greed.

  12. Sho! MNO’s just want to poke at everybody and anybody standing close to them. The truth is people are skittish and try to hold on to their business and models as best as they can while trying to prevent any threats to their systems. This was a waste of time and the MNO’s are looking in the wrong direction this time.

  13. Richard Wickens on

    What scares me the most is that the people in charge had to have a friggin meeting in parliament to discuss it. The next move by them is going to be increasing data costs, mark my words. MTN and Vodacom already know that OTT’s can’t be regulated (at least I hope so) but this will give them an excuse to ramp up the cost of data.

  14. Necessity is the mother of invention. It would appear that it is necessary to start thinking of platforms for OTT other than our stone age mobile operators, but with the same kind of ubiquity.

    I’m sure it can be done, WiFi is perhaps the best current candidate.

  15. But remember none of them asked for this meeting in parly, it just happened to fall into their laps out of thin air. Yeah, right.

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