South Africa’s largest mobile operator, Vodacom, has told public hearings on competition in South Africa’s technology sector that operators are being “disintermediated” by over-the-top (OTT) providers like WhatsApp.
The company was presenting its views to a panel of Icasa councillors and managers on Friday afternoon.
The value chain between network operators and OTT players is broken, Vodacom said in its oral submission.
The business model of OTT players is to build a large consumer base and give them something that they perceive to be free — often a social networking platform. “However, they are moving into services that are traditionally the services of voice operators,” said Vodacom executive head of innovation Jannie van Zyl.
“One such example is WhatsApp, which has announced it will be offering voice services. This is where the network operators are being disintermediated.”
Van Zyl said OTT players are using network operators’ own services to “cannibalise” the business.
MTN and Telkom, South Africa’s two other big telecoms operators, have expressed similar views in recent weeks. On Thursday, at the same Icasa hearings, Telkom’s head of regulatory affairs and public policy, Richard Majoor, warned that OTT players were “skimming” voice revenues from the operator and this was making it more difficult to cross-subsidise uneconomical rural areas using money made in profitable urban centres.
MTN South Africa CEO Ahmad Farrouk, meanwhile, told TechCentral in an interview two weeks ago that a balance was needed. He described the way OTT players use mobile operators’ networks today as “unfair”.