Press release: OTTs: Disruptive for Some, Beneficial for All

Published on: 2016-01-26

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South Africa’s Internet Service Providers’ Association (ISPA) has urged the country’s mobile networks to develop new ways to partner and compete with innovative OTT services for the benefit of consumers and to drive the uptake of broadband.

OTT is the term used for the transmission of voice and data communication by cellular network customers. Because OTT services are finding growing favour with many contract and prepaid mobile users, South Africa’s mobile network operators are concerned about the impact on their revenues. This has resulted in Parliament’s Portfolio Committee on Telecommunications and Postal Services scheduling a meeting this month to discuss the possible regulation of OTT services.

“History tells us that you cannot regulate progress out of existence. Imagine how the GDP-boosting growth of cellular phones in South Africa would have been constrained if Telkom had decided in 1994 to approach Parliament with the unworkable idea that landlines and cellphones should be bundled together in order to protect its monopoly?

“Indeed, there had previously been suggestions of blocking services like Skype on fixed-line networks, at a time when Voice over Internet Protocol (VoIP) services were reserved for a limited number of operators. Since the evolution of our regulatory environments, these services have been liberalised and form part of the value proposition for broadband customers.

“The mobile networks forget that they once were the new kids on the block. Their growth was encouraged and look what a wonderful difference they made to South Africa. OTT services have the potential to further democratise communication and drive uptake of broadband because they offer an affordable alternative to the millions of South Africans who cannot afford to make a call or to pay 50 cents each time they send a single SMS,” said Mr Beneke, ISPA Chair.

He urged the networks to innovate with regards to OTT services and network services co-existing. “Operators are already thinking out-the-box when it comes to over-the-top. For example, positive airtime balances are required to access OTT services like WhatsApp. Fair usage protocols have also been applied for some time,” explained Mr Beneke.

ISPA is encouraged that some network operators are on record as saying that they are committed to establishing an amicable relationship with OTTs. ISPs – which have for more than a decade been using IP networks – have revenue models aligned for selling capacity on IP-based networks, like OTTs. They therefore welcome services that increase demand for this capacity. This increase in data demand is also identified by other networks, including mobile networks, as a major driver of their revenue growth.

“Africa desperately needs OTTs to grow Internet participation. Attempting to regulate this technology will hinder the continent’s ICT development, be a technical nightmare to enforce, and simply encourage the growth of a plethora of other lesser-known messaging applications,” concluded Mr Beneke.

Further Information

For further information, please contact the ISPA secretariat on the Contact ISPA page.