Operators fear becoming 'dumb pipes' - TechCentral

Operators fear becoming ‘dumb pipes’

Alison Gillwald

Alison Gillwald

Parliament’s discussions about regulating over-the-top (OTT) services kicked off on Tuesday with an expert saying that networks fear becoming pure infrastructure players.

OTT services such as WhatsApp and Skype offer voice and text message offerings over data networks — often at a lower cost than traditional telecommunications services.

But the growth of these services has caught the attention of mobile networks with the CEOs of both Vodacom and MTN last year calling for the regulation of OTTs.

Services such as WhatsApp currently don’t contribute financially to local networks, an issue that has previously been highlighted by Vodacom and MTN.

Subsequently, parliament’s portfolio committee on telecoms & postal services set up a meeting on OTT regulation on Tuesday. Committee chair Mmamoloko Kubayi said she initiated the meeting after she realised that OTT is becoming an issue in the industry.

Professor Alison Gillwald, executive director of Research ICT Africa, was the first to present at the meeting.

She said that cheaper smartphones are “driving data take-up” but that “operators are anxious about becoming dumb pipes”.

“Are mobile operators negatively affected by OTTs? Is anybody about to exit the market?” said Gillwald at the meeting.

She also said at the meeting that South Africa is facing other important telecoms issues, apart from OTT.

For example, she highlighted that spectrum in the country has become a “regulatory bottleneck”.

“Six years we’ve been meeting on this issue and nothing gets done,” said Gillwald.

Gillwald also said that President Jacob Zuma’s splitting of the department of communications in 2014 has “had a devastating effect” on the sector.

Meanwhile, Kubayi said the gathering in parliament on Tuesday is a meeting and not a hearing into possible OTT regulation in SA.

“Get it clear colleagues, we are not here to stifle competition,” said Kubayi.

But the Democratic Alliance MP Marian Shinn asked why the meeting is taking place in the first place. “Who raised this topic? It was a complete surprise,” she said. “Why are we not discussing the issue of the cost of data?”

Other stakeholders speaking at the meeting on Tuesday include department of telecoms & postal services and communications regulator Icasa.  — Fin24

6 Comments

  1. Hitting Thefan on

    The meeting was called because Vodacom and MTN used there influence to priorities this issue of OTT services. Instead of them innovating they want to stifle. They now off course sell more data but are most probably loosing out on the voice and sms functionality. The same products that allow them to exploit there customers.

  2. Teresa Williams on

    Cellphone companies are greedy and their customers hate them – at some point, that is going to come back and bite them on the a*rse.

  3. Vusumuzi Sibiya on

    >>But the Democratic Alliance MP Marian Shinn asked why the meeting is taking place in the first place. “Who raised this topic? It was a complete surprise,” she said. “Why are we not discussing the issue of the cost of data?”

    The first order of business should have been to find out;

    >>“Who raised this topic?

    …and what or how much was the motivation received from the colluding culprits –

    >>For example, she highlighted that spectrum in the country has become a “regulatory bottleneck”.

    >>“Six years we’ve been meeting on this issue and nothing gets done,” said Gillwald.

    Yep! that certainly does say a lot and leaves some pertinent unanswered questions about how a whole day could be set aside to discuss nonsense…

    …there’s definitely some person(s) who shouldn’t be on this portfolio committee on telecoms & postal services to begin with; and the person(s) who decided that this is a point for holding a meeting for an entire day over – should be the first to be booted out of the committee.

  4. Do the right thing on

    Its strange vodacom and MTN , you guys didnt raise the issue when Mxit was launched, also didnt you organisational risk division prepare you guys , that you guys will need to start looking at alternative revenue streams…..

  5. They should not look into alternative revenue streams, they must just adapt, become more efficient, cost-effective and competitive. Even when it means reducing staff, salaries and first of all exec salaries and bonuses.
    No doubt Cell C execs make also very decent incomes, but the company always knew it was in for a massive battle, an uphill struggle to take on the old colluding, price fixing duopoly over the last 15 years. And they rather adapt, and offer Whatsapp for free, or for a mere R 5 PM.

  6. Greg Mahlknecht on

    They should have bought in to Tencent and got some WeChat action from back then… isn’t Naspers’ shareholding in Tencent worth twice Vodacom’s market cap or something?