Mobile networks fear becoming ‘dumb pipes’

2016-01-26 11:20 - Duncan Alfreds, Fin24
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Parliament has held a meeting into possible regulation of services such as WhatsApp in South Africa. (Duncan Alfreds)


Cape Town - Parliament’s discussions about regulating over-top-services (OTTs) 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 telecom services.

But the growth of these services has caught the attention of mobile networks with the chief executive officers 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 [JSE:VOD] and MTN [JSE:MTN].

Subsequently, Parliament’s Portfolio Committee on Telecommunications and Postal Services set up a meeting on OTT regulation on Tuesday. The Chair of Parliament's Portfolio Committee on Telecommunications and Postal Services, Mmamoloko Kubayi, has said she initiated the meeting after she realised that OTT is becoming an issue in the industry.

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

She said that cheaper smartphones are "driving data takeup" 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 telecommunications 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 (DA) Shadow Minister for Telecommunications and Postal Services, Marian Shinn, asked why the meeting is taking place in the first place.

"Who raised this topic? It was a complete surprise," said Shinn.

"Why are we not discussing the issue of the cost of data?" added Shinn.

Other stakeholders speaking at the meeting on Tuesday include the likes of the Department of Telecommunications and Postal Services and the Independent Communications Authority of South Africa (Icasa).

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