Mobile operator Cell C has come out swinging at its competitors, saying Vodacom and MTN’s attempts to have “over the top” (OTT) mobile services such as WhatsApp and Facebook regulated, would stifle innovation and investment.
MTN has been vocal in recent months about its concerns that OTT services like WhatsApp allowed people to communicate cheaply, piggy-backing on multi-billion rand investments by mobile network operators into extending their data coverage, and eating into voice call profits.
Yesterday, parliament’s portfolio committee on telecommunications and postal services heard arguments from players and experts in the industry over whether these services should be subjected to the same regulations the mobile networks were subjected to.
Also of concern was the high cost of data in South Africa and the prohibitive cost of SMSes, which the committee heard were “completely overcharged and overpriced”.
Committee chairwoman Mmamoloko Kubayi said reports that the interactions had been as a result of lobbying by the service providers were incorrect. Rather, she said, she had noticed at several ICT conferences that the matter of OTTs was being raised as a point of concern.
Both MTN and Vodacom came out in full support of similar regulations to be applied to OTT providers.
MTN corporate services executive Graham de Vries told the committee regulations would ensure consumer details were protected from being sold, and would allow the government to intercept messages “on very reasonable grounds” and gather taxable income.
Vodacom managing executive for regulatory affairs Dr Andrew Barendse said that while they did not want the services shut down, they were in favour of regulations being placed on companies offering “similar or competing services”.
But Cell C chief legal officer Graham Mackinnon said Vodacom and MTN were “hiding behind” regulatory issues of security and safety, when what they really wanted was for the OTT services to be regulated in “teleco” terms such as being licensed and having to abide by conditions around service delivery and connections.
“We are opposed to any additional regulations on OTT services. They will stifle innovation and investment. We can't fight them because South Africans will be left behind if we develop protectionist regulation.”
Research ICT Africa executive director Dr Alison Gillwald told the committee an “old-fashioned competition regulation of new services which open up the internet to the poor needs to be guarded against”.
“We need to think very carefully before we regulate.”
Gillwald also pointed out that the “free” services such as WhatsApp, Google hangouts, Facebook messenger and Skype all required data bought from the mobile operators.
And she said these services were driving increased data usage across all the networks. Data costs remained “too high” and SMSing was “overpriced” she said.
All three major networks reported increased revenue from data in 2014 – with Cell C, which has taken a stance to partner with WhatsApp and Facebook to provide free or subsidised access to these services, reporting a 106% increase in the amount of data used in 2014.
But, De Vries argued that while companies were profiting from this drive in data, the increase in usage meant that they had to continue to invest in broadening their infrastructure- which cost billions each year.
A warning against regulation was however sounded from an unlikely source – the Post Office. Group financial officer Mthoko Mncwabe told the committee that “the Post Office is in the same situation (as the mobile operators) because we didn't embrace innovation and we fell behind. We are trying to protect industries that are not trying to innovate.”
Microsoft’s Siyabonga Madyibi, representing Skype, said “we must caution against using 20th century regulations and putting them on 21st century technology”.
Speaking for Facebook and WhatsApp, Ebele Okabi said the two companies did not sell user information and were “tremendous” drivers for data sales for mobile operators.
Mobile networks at odds over bid to regulate free call services
MTN has been vocal in recent months about its concerns that OTT services like WhatsApp allowed people to communicate cheaply, piggy-backing on multi-billion rand investments by mobile network operators into extending their data coverage, and eating into voice call profits.
Yesterday, parliament’s portfolio committee on telecommunications and postal services heard arguments from players and experts in the industry over whether these services should be subjected to the same regulations the mobile networks were subjected to.
Also of concern was the high cost of data in South Africa and the prohibitive cost of SMSes, which the committee heard were “completely overcharged and overpriced”.
Committee chairwoman Mmamoloko Kubayi said reports that the interactions had been as a result of lobbying by the service providers were incorrect. Rather, she said, she had noticed at several ICT conferences that the matter of OTTs was being raised as a point of concern.
Both MTN and Vodacom came out in full support of similar regulations to be applied to OTT providers.
MTN corporate services executive Graham de Vries told the committee regulations would ensure consumer details were protected from being sold, and would allow the government to intercept messages “on very reasonable grounds” and gather taxable income.
Vodacom managing executive for regulatory affairs Dr Andrew Barendse said that while they did not want the services shut down, they were in favour of regulations being placed on companies offering “similar or competing services”.
But Cell C chief legal officer Graham Mackinnon said Vodacom and MTN were “hiding behind” regulatory issues of security and safety, when what they really wanted was for the OTT services to be regulated in “teleco” terms such as being licensed and having to abide by conditions around service delivery and connections.
“We are opposed to any additional regulations on OTT services. They will stifle innovation and investment. We can't fight them because South Africans will be left behind if we develop protectionist regulation.”
Research ICT Africa executive director Dr Alison Gillwald told the committee an “old-fashioned competition regulation of new services which open up the internet to the poor needs to be guarded against”.
“We need to think very carefully before we regulate.”
Gillwald also pointed out that the “free” services such as WhatsApp, Google hangouts, Facebook messenger and Skype all required data bought from the mobile operators.
And she said these services were driving increased data usage across all the networks. Data costs remained “too high” and SMSing was “overpriced” she said.
All three major networks reported increased revenue from data in 2014 – with Cell C, which has taken a stance to partner with WhatsApp and Facebook to provide free or subsidised access to these services, reporting a 106% increase in the amount of data used in 2014.
But, De Vries argued that while companies were profiting from this drive in data, the increase in usage meant that they had to continue to invest in broadening their infrastructure- which cost billions each year.
A warning against regulation was however sounded from an unlikely source – the Post Office. Group financial officer Mthoko Mncwabe told the committee that “the Post Office is in the same situation (as the mobile operators) because we didn't embrace innovation and we fell behind. We are trying to protect industries that are not trying to innovate.”
Microsoft’s Siyabonga Madyibi, representing Skype, said “we must caution against using 20th century regulations and putting them on 21st century technology”.
Speaking for Facebook and WhatsApp, Ebele Okabi said the two companies did not sell user information and were “tremendous” drivers for data sales for mobile operators.
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