Parliament to probe OTT services - TechCentral

Parliament to probe OTT services

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Parliament intends probing OTT service providers, which include the likes of Facebook-owned WhatsApp

Parliament’s portfolio committee on telecommunications & postal services has set aside a full day later this month to probe so-called “over the top” (OTT) services to determine whether policy interventions are required to govern them.

OTT services include the likes of voice-over-Internet protocol and messaging applications WhatsApp, Messenger and Skype. Several local operators, including MTN, Vodacom and Telkom, have warned vocally in the past 18 months that OTT providers should be regulated to ensure fairer competition.

The parliamentary committee will hold the hearings on 26 January at a venue still to be determined.

According to the committee, the hearings will consider what policy and regulatory interventions might be necessary. They will also look at the impact of OTT services on competition in South Africa’s telecoms industry and ask whether there is a need for OTT providers to be defined as telecoms services (providing voice and data) or as telecoms infrastructure.

If they are determined to be the latter, then the committee wants to know whether they should be subject to South African licensing and regulatory obligations, including emergency call access and legal interception requirements.

In 2014, former MTN South Africa CEO Ahmad Farroukh launched a broadside against OTT providers, saying the operator was not prepared to spend billions of dollars building advanced telecoms networks just so that OTT players could get a “free ride” by competing with MTN using its own costly infrastructure.

Farroukh said OTT players — including companies such as Google, Facebook and Facebook-owned WhatsApp — had to reach a “certain understanding”.

He said a balance was needed, describing the way OTT players used mobile operators’ networks as “unfair”.

OTT providers routinely accused the operators of being greedy, when, in fact, the reverse was true, Farroukh said.

Vodacom and Telkom have also warned that some sort of regulation is necessary to govern OTT services.

Cell C, on the other hand, has elected to work closely with OTT players, helping Facebook, for example, to launch its Free Basics service in South Africa. Free Basics offers consumers free access to a limited set of services and websites from their mobile phones.

Cell C CEO Jose Dos Santos has previously expressed an interest in working closely with OTT service providers.  — © 2015 NewsCentral Media

36 Comments

  1. OMG, our rather ignorant politicians interfering in free competition again. I really hope they will not be swayed or “smoothened” by the old BUTs, the Big Ugly Telcos.
    Now finally the old colluding mobile duopoly and the archaic dominant fixed line operators are feeling competition in many ways, they suddenly converted to crybabies asking for protective measures.

    Give me a break.

  2. There are two ways to increase revenue – cut cost or innovate.

    One of these is a death-spiral to oblivion…

    Jose Dos Santos knows wassup…

    –aknit

  3. Vusumuzi Sibiya on

    So an entire whole day for Parliament’s portfolio committee on telecommunications & postal services has been set aside to consider what exactly…???

    Who are these clowns…??? in a committee on telecommunications & postal services, that still don’t know that what OTT providers are, to the telcos – is zeros and ones; the same zeros and ones called data and which the telcos are already selling and the consumer is already paying for –

    …surely you don’t need to set aside a whole day to consider that; unless of-course you are totally clueless about telecoms and shouldn’t be on a committee on telecommunications & postal services in the first place.

  4. I think some of us have been on the ICT space long enough to understand fully what we are doing. I also think It would have helped you greatly to have understood what will the program on the day entails before calling people clowns. I think its about time that we pull our efforts together as south Africans and ensure that we take this country forward. Your positive comment on the matter would have helped greatly. I don’t have to publish my Telco credentials on this space for you to understand exactly who refereeing to as clowns!!!!!

  5. Vusumuzi Sibiya on

    >>I don’t have to publish my Telco credentials

    The former MTN South Africa CEO Ahmad Farroukh also had Telco credentials; and he too, was a clown that wanted to have a fist fight with OTT service providers on this matter;

    Please enlighten me with your Telco credentials –

    Exactly what is it that needs consideration…???

  6. I thought you would have known by now what is the role of the government. Amongst other things, we are here to listen to stakeholders on any matter of importance within the sector and come up with appropriate policies and regulations for intervention whenever there’s a need for that. I shall leave it here!!!! Finally, It will perhaps also help to read the whole statement for you to understand what needs to be considered!!!!

  7. Vusumuzi Sibiya on

    >>Amongst other things, we are here to listen to stakeholders on any matter of importance

    When government organizes an “Indaba” to discuss how – MTN, Vodacom, Telkom, Samsung, Sony, LG, etc. etc. along with everyone else who is benefiting from OTT on Eskom’s grid is going to be contributing towards the nuclear program, please invite me;

    …as for the considerations of the clowns relating to this particular article; those would be better resolved in the company of Floyd Mayweather; so I am going to pass on any invite that involves OTT and the likes of MTN, Vodacom and Telkom.

  8. The role of government is to make sure the public is not ripped off. We know they have failed miserably at that as a) they are the ones doing the ripping-off and b) we are paying some of the highest rates in the world for mobile data.

  9. Vukko, please tell me you are not being serious….this type of thinking is completely misplaced!!!!!!!! What do you mean the government is ripping you off?????

  10. Vusumuzi Sibiya on

    Come on Jacob, let’s not go there as-if #FeesMustFall and etolls aren’t obvious enough…

    Are you seriously taking an entire whole day to entertain Circus Clowns…??? Please!!!

  11. LOL, please. Every time #1 and cronies dip their hand in the cookie jar, do you just look away? Govt. has failed us miserably. Icasa has failed us miserably. If you are in denial of this, please tell me, why are we still being ripped off for data? In Croatia, a country that was in civil war at the same time we were becoming a democracy, I can get uncapped LTE for 7 days, for less than R200.

  12. Hahahaha….Vusumuzi Sibiya!!!! I think we really have number of common things to talk about!!!! I hope you will please allow me that opportunity to meet you one of the days and deliberate on number of pertinent issues which in one way or another affect our livelihood!!!! This is an honest plea!!!!

  13. Simple equation for Africa – no telco equals no data for consumers. Yes rip off and too expensive etc etc but no internet access for masses with no telco so they have some leverage. Despite Facebook/Google free internet noise will be a decade before this is able to penetrate consumer masses for Africa. If telco’s don’t make profit, Africa’s mobile internet is under danger and telco’s get more desperate and oppressive. Can see the telco’s view and the consumer reality for data access despite the irritation of how much profit they have been hitting the consumer with over the past decade and a half. (Also think they should have been far cleverer strategically and taken good chunks of their enormous profit and invested in large chunks of Facebook etc and they messed that up!)

    Governments not irresponsible to get involved as they need to understand of the macro picture for stability of consumer internet access and the GDP growth that comes from connected consumers. (Will now wait for the screaming reaction to start.)

  14. Hi Jacob, I’m going to branch this thread to try keep it civilised and raise the points objectively.

    The biggest thing to note is the distinction between an infrastructure provider and a service provider. The infrastructure providers are competing with all other infrastructure providers that provide access to the internet pipe. (Fibre co’s, Telkom, Government programs, free gov wifi, etc.) These services should be provided and charged for as required.

    The second component is the services that consumers use on the infrastructure. If I’m using skype to communicate over internet (via landline or cell infrastructure) that should have absolutely no effect on the price that I pay for the infrastructure. Data use is data use.

    It is only when an infrastructure provider is also a service provider that it is in their interest to muddy the distinction. Yes, OTT services are a massive competitor to Voice and SMS revenues, but that does not mean that they should be charged for running on that infrastructure. As a consumer I pay for the infrastructure already. Its the same way that BBM killed the SMS (for a while).

    If telco’s want to be competitive they need to offer competitive services. Charge the rates that you need to to deliver infrastructure and do the same for other services(voice and data). By conflating the 2 business models you’re implying that your infrastructure business is being destroyed by VoIP, which is not the case at all. Yes, their business models need to change, and yes, they will likely need to split the parts of their businesses. That is inevitable and no short term legislation is going to change it. It also encourages them not to innovate.

    You also have the added issue of these competitors being large international companies that if you try and regulate will just pull out of our small market, ultimately reducing competition, firming up the current monopolies and costing the consumer considerably more.

    I hope they allow public comment on that day that they discuss it in parliament…

  15. In essence Sibiya is asking why is it that mines and all other industries use electricity to make value added products but are not expected to contribute to Eskom’s infrastructure bill but you are considering that for OTTs? It is not OTTs fault that network ops are lazy, not creative and have no way to add value to their own network and now want to run to uncle Sam for protection. They must price their bits according to what they need to build infrastructure if their price is not competitive they should get out of that business.

  16. indeed adapt or die but they know they can buy uncle Sam’s protection, so they don’t need to do anything themselves…

  17. Although your point is well made Sibiya, this one is a bit tricky because VD, Telkom, LG, Sony’s products/services are not infringing on Eskom’s space. If one of them was to discover a magical way to turn 1MW into 1000MW and sell it at a fraction over Eskom’s distribution network, then ESKOM would inevitably resist that. The point being if the OTTs steered clear of operator’s traditional revenue streams voice and messaging and delivered other services, there would be no conflict.Voice is a service regardless at which layer it is provided. So is the government regulating voice the service? or are they regulating the pipe. If whatsapp cannot be regulated then are we saying that if Vodacoms moved away from providing CS service to providing VoIP then they now fall outside the reguatory framework? There has to be some or other regulation to whatsapp voice eg it should be subject to lawful interception, it should adhere to RICA etc

  18. Not sure what you’re saying Ryan. On the one hand you say no Internet for the masses with no telco, but then you also say it’ll be a decade until there is market penetration for the masses. So, essentially, the masses already have no access to Internet anyway, simply because it is too expensive.
    What has this got to do with being in Africa anyway? SA has a well-established infrastructure and the technical know-how to operate it. We are just at the mercy of an ailing parastatal and greedy cellular operators. The only reason why these CEO’s make a big noise about OTT services such as Whatsapp is so they can justify their absurd earnings. R45 Million, hello wtf!?

  19. Greg Mahlknecht on

    I’m wondering how any of this is enforceable? WhatsApp, Skype, WeChat are all free services that we download and use on servers around the globe. So if WhatsApp says “we won’t pay” – what then? How can they stop people downloading and using it?

    I think the Telcos are hoping that the committee is utterly clueless and they can baffle them with bullshit and get some favourable regulation thrown their way – probably a very long shot, but it costs them nothing to try.

    It’s a pity there’s not enough knowledge in the government for someone to have seen this for what it is, stood up and said “go away” .. us even considering regulating OTT must make us the laughing stock of developed countries.

  20. Now this is sensible and constructive argument that you presenting Roger. I definitely follow the logic in the thinking and I fully agree with the fact that it makes no sense for the government to take a stand and try and protect the telcos interests while they making exorbitant profits. It is equally important to note though that the Network Operators are indeed channelling a lot of money to improve the infrastructure in trying to keep up with the demand and upsurge of data on their networks. The fact of the matter is that some of these OTT services have really brought some serious disruptive innovation in the space and this is a serious call for the infrastructure providers to rethink their business models and not resort to tactics of trying to throttle this emerging players in the space. The fact of the matter is that its very convenient for my mother to communicate with me on whatsapp any time of the day and this is contributing immensely in ensuring access to ICT services. The ideal situation really could be the case of seeing the Operators and the OTT players coming up with specialised offerings structured around the use of these services. Cell C’s approach might be the case in point here.The scenario does beg the questions though: who pays?? The OTT providers use the networks and they’re going to make obscene amounts of money while doing so!!!! It is also a fact though that the emergence of these OTT offerings and the speedy growth in their popularity is rapidly eroding core voice revenues and the Operators are taking some serious knock on their bottom lines due to these developments!!!! I also have to agree with you that the public participation will be absolutely key while deliberating on this matter. I am aware though that the initial engagement will be with the Operators and some of the Internet service providers and other bodies in the space. I will however bring it to the Portfolio Committee Chair’s attention the importance of ensuring that there is also an extensive engagement of the public as they will be affected by whatever decision get taken on the matter!!!!!!! The public cannot be left out of this!!!!!

  21. Vusumuzi Sibiya on

    >>Although your point is well made Sibiya, this one is a bit tricky

    Thank you kuli…

    …perhaps I need to make my point a lot more strongly, so that all the clowns who are entertaining this probe into OTT providers – actually get the message perfectly.

    In the same way that a McDonalds, Nandos, Wimpy, Steers, etc. would be quite right to show the middle-finger to Eskom, if they wanted to have a bite out of every burger which the customers have paid for –

    …because Eskom can’t have such businesses enjoying a so-called “free ride” on their grid which they have to invest billions into to ensure no load-shedding;

    The middle-finger also needs to be shown to these MTN, Vodacom and Telkom clowns… and it certainly doesn’t take an entire whole day to do that.

    I have personally witnessed plenty of people do it; and whilst driving, in a relativity short space of time; and when I’ve done it – it has taken me no longer than 5 seconds…

    …so why have an entire whole day wasted that could be better spent out on the golf course???

  22. Vusumuzi I think your example of Burger King or rather Wimpy and the Eskom power grid is very superficial. You really cannot raise that as an argument! Let me be quick to admit though that I do understand your point of view that these Operators do sell data to the consumers for them to be able to use the OTT services so they are deriving revenue from data bundles already. But the major issue here is that network operators are complaining that some of their traditional services such voice and SMS are taking some serious hammering due to direct competition from these OTT offerings. I need to point it out though that it is not in the government interest to protect the network operators to the detriment of the end-users. It will however be fair for the government to sit and listen to what the Operators have to say and on the basis of that then proper policy directives on the matter be crafted and adopted if need be. Surely Eskom is not in the business of making fast food or something similar to that for them to complain that Burger King is impacting on one of their business offerings!!!!!! There will still be enough time to go play golf after the entire day has been spent on the deliberation of this matter!!!!!!

  23. Vusumuzi Sibiya on

    >>network operators are complaining that some of their traditional services such voice and SMS are taking some serious hammering

    Have they shared with you, how much of a “serious hammering” they are taking from the data side of the business…???

    In-fact, its such a “serious hammering” that they are now wanting to have a double bite at it; just to satisfy that “WWE hammering addiction” that they crave so much… the greedy clowns.

    Jacob, you are going down that same path of the etolls saga and there’s no way that you can in-force this when OTT providers show you the middle-finger.

    Let’s try and be civil and polite to these clowns;

    Tell you what… scratch showing them the middle-finger –

    How about you send all three a WhatsApp msg that says we will look into this when the rest of the developed world has regulated OTT providers…

    …oh, and in keeping with being polite – also wish them a prosperous 2016; these guys should not be wasting your time at the tax-payers expense, especially when there’s more serious issues for the government to attend to.

  24. Greg Mahlknecht on

    Nobody would use the infrastructure if it weren’t for OTT services. The world wide web is an OTT service. So is email. So is Facebook, and every other app that is connected.

    Last I checked, the telcos were making obscene amounts of money from data services. This income would not exist were it not for OTT.

    The should be begging and praying for more OTT services, not trying to attack the current ones.

  25. The only rational output of the day is to ensure that those developing so-called OTT services (actually just Internet services) receive protection from mobile operators who want to manipulate the Internet service they provide on their network in order to prejudice certain traffic types that they don’t “like” for commercial reasons.

    Since there is little service innovation from the mobile operators, users depend on open Internet services to gain access to innovation. If the operators had the way it would be 60c per message text only 160 char SMS. Good enough for your parents, good enough for you!

  26. Jonathan Christen on

    Why dont they rather set aside a full day to get postal services to work?? International retailers are starting to refuse RSA clients because of the amount of orders that go missing in our postal service. I really wish these people would spend time where they need to! Some minister has probably got an “incentive” from one of these telcos to make this happen. I’m so sick of our corrupt government.

  27. Jonathan Christen on

    So our office is too big for just us, so my boss rents out desks to other companies who only needs one or 2 desks. He charges them on a per day rate,,, Why does his landlord not complain? Because once you have paid for the space that the landlord wants to lease, it is up to you what you want to do with that space.
    In the same way, once you have bought your data, it should be up to you whether you want to use it for browing the internet or message and make calls with it.

  28. Vusumuzi Sibiya on

    >>I’m wondering how any of this is enforceable?

    …and when you need Rosey, she’s nowhere to be found – she would’ve been able to sort out these Telco clowns with one SMS stating;

    >>us even considering regulating OTT must make us the laughing stock of developed countries.

  29. Andrew Fraser on

    If someone was to figure out a way to provide 1000MW over 1 MW we should welcome them in the same way consumers welcome the OTT players.

    “Intervention” by well meaning but essentially clueless government to maintain the staus quo of overpriced archaic services is the last thing we need.

    The role of govt in this matter is to stay out of the way. The MNOs need to learn how to compete on their own without a big brother to protect them.

  30. Andrew Fraser on

    Nonsense. Disruptive technologies are just that. Disruptive. The networks are not surprised by OTTs, they’ve seen them coming for ages. However, they have failed to manage their own services to compete. Now they are crying foul, and requesting intervention. This is completely contrary to the concept of net neutrality, and ultimately is anti-competitive and anti-consumer.

    If government is really interested in making a difference, time would be much better spent on the digital dividend spectrum licensing than on this OTT bullshit. More access to spectrum will reduce the net cost of data and will allow MNOs to achieve through volume what they currently do through high prices.

    The MNOs are utilities and should not be given any special protection.

  31. Andrew Fraser on

    I think the risk is not that the MNOs will bill the OTT providers, but rather that they will segment pricing. i.e. data used for messaging or VOIP protocols will be billed at a higher rate to the consumer. MTN and Vodacom used to provide for this in their T&Cs in the early days of Skype. Not sure if it was ever implemented, or if it still exists but it is blatantly contrary to the concept of net neutrality, not to mention anti-competitive and anti-consumer.

  32. William Stucke on

    > The role of government is to make sure the public is not ripped off.
    Actually, no. The role of government is to protect citizens against internal and external threats. The rest is scope creep.

  33. William Stucke on

    > The OTT providers use the networks and they’re going to make obscene amounts of money while doing so!!!!
    Rubbish. Facebook invested as much money in NETWORK INFRASTRUCURE last year as the entire MTN Group did globally, and twice as much as Vodacom did globally.
    And Twitter makes a loss.
    Please check your facts. And use fewer exclamation marks 😉

  34. That’s a little simplistic don’t you think? I would say that one of government’s roles is the general welfare of the citizens, and that includes making sure that large corporations, especially those providing much needed services such as Internet access, are not taking the piss, by way of regulation that is fair.

  35. No one disputed the fact that the OTTs have rolled out their own infrastructure and a lot of money was also spent in doing so. As parting shots…..thank you for the free lessons!! Just by the way…….my last name is Medupe and happen to be black and took english at high school as a fifth language!!!

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