Cell C: Regulating OTTs could hurt industry

2016-01-14 16:58 - Gareth van Zyl, Fin24
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Cell C's head office in Johannesburg. (Gareth van Zyl)


Johannesburg - South Africa’s third largest mobile network Cell C says that possible local regulation of over-the-top (OTT) services like WhatsApp could harm the industry and consumers.

OTT services - which range from WhatsApp to Skype and Google Hangouts - allow users to make messages and calls over data networks - typically at lower costs than traditional telephone calls or SMS.

But local growth of these services prompted top chief executives at Vodacom and MTN last year to call for regulation of OTT services.

READ: Vodacom calls for OTT regulation & MTN targets 'free loading' WhatsApp

And now that call has been taken to the Portfolio Committee on Telecommunications and Postal Services which said in a statement on Thursday that “mobile operators are requesting that Parliament consider passing a policy or regulations of data services on mobile networks such that they generate revenue for carrying the data services on their bandwidth infrastructure”.

READ: WhatsApp faces possible regulation in South Africa

The committee has scheduled hearings on January 26 to discuss possible regulation of OTT services in South Africa.

However, in light of the upcoming hearings, Cell C is taking a different stance to its rivals on the matter.

“We strongly believe that this (regulating OTT players) could be to the detriment of the industry and consumer at large,” Cell C chief executive officer, Jose Dos Santos, told Fin24 via an email response.

“Contrary to our competitors, Cell C has been embracing the services offered by OTTs,” Dos Santos told Fin24.

Cell C provides free access to Facebook and basic internet services through Internet.org. The company also offers unlimited WhatsApp at R5 per month, Dos Santos explained.

The Cell C CEO further said his company plans to attend the OTT hearings on January 26.

“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,” he added.

Cell C is South Africa’s third largest operator with 22 million subscribers in South Africa.

Last month, Cell C announced that its board had accepted an offer from JSE listed Blue Label Telecoms [JSE:BLU] to acquire 35% of the mobile network for R4bn.

The boards of Cell C and its holding company 3C Telecommunications have also accepted an offer from Cell C management and staff to hold about 30% of the mobile network's shares for R2.5bn.

Read more about: cell c  |  jose dos santos  |  regulation