OTTs regulation could hurt network industry

Amidst calls for the regulation of over the top services (OTTs) in South Africa, for which a committee meeting will be held on the 26 of January 2016, Cell C, South Africa’s third-largest network said that this move could harm the industry.

This came after major local networks lodged complaints with Parliaments Portfolio Committee on Telecommunication and Postal Services that OTTs should be regulated.  Over the top internet services such as WhatsAPP, Skype, Google Hangouts allow users to make calls and send messages at incredibly lower costs compared to cell phone calls or SMS and as result they have gained popularity among consumers.     

Reportedly, local cell phone services providers have been pushing for these services to be controlled because they claim that OTTs are providing telecommunication services without any cost whereas, local operators have had to comply with various licence and tax regulations to be able to operate. Their argument is that these  players are able to operate “over the top” of  local networks without having to comply with regulations and as a result, local operators are clamouring for a level playing field to be established between players.  

The implications
According to a statement from Arthur Goldstruck, managing director at World Wide Works , “the real issue is that these OTT players are cutting into the revenues of local operators” so they are worried about their bottom-line and are trying to protect their monopolies. “Smses have always been expensive but instant messaging offers messages at a reasonable cost and the revenues that networks are enjoying probably unfairly are suddenly vanishing,” said Goldstruck.

Meanwhile, Cell C has been embracing the services offered by OTTs. Jose Dos Santos, Cell C chief executive officer told Justmoney that “as the consumer champion we believe that OTT services add real value to our customers and we have partnered with both WhatsApp and Facebook to ensure that these types of services remain affordable”.

On the other hand MTN SA told Justmoney that telecommunication operators and OTTs can co-exist in “agreed and mutually beneficial relationship” and will make a representation to the Portfolio Committee on Telecommunications and Postal Services on its viewpoint regarding OTT operators.     

Dos Santos added that Cell C offers its customers free access to basic internet services and the company offers unlimited WhatsApp usage at a mere cost of R5 per month.  
“It is key for mobile operators and OTTS  to find innovative ways to work together and we look forward to building on our existing partnerships with the OTTs”. Cell C also strongly believe that regulating OTTs could be to the detriment of the industry and consumers at large”, Dos Santos highlighted.

Cell C will attend the OTT hearing to be held on the 26 January by the Portfolio Committee on Telecommunications and Postal Services.