Photo by: Bloomberg
As over-the-top (OTT) voice over Internet protocol (VoIP) services start to threaten the revenues of mobile operators, telecommunications giant MTN on Tuesday called for collaboration.
The pressure of maintaining revenue amid the emergence of OTT services, such as Google Hangout VoIP and the soon-to-be-offered free voice calls over WhatsApp, reared its head in October during public hearings facilitated by the Independent Communications Authority of South Africa on the state of competitiveness in South Africa’s information and communication technology (ICT) sector.
Stakeholders, at the time, noted that South Africa’s uptake of OTT was in line with global trends, but would cost the sector $479-billion between 2012 and 2020, as it reduced returns on investments and the ability of operators to cross-subsidise loss-making services such as universal service obligations and rural telecommunications access.
Operators, such as Vodacom, MTN and Telkom, warned of the impact of the increasing uptake of OTT VoIP on mobile platforms, which, despite remaining relatively small, could potentially grow exponentially on the back of the popularity and convenience of mobile broadband.
Speaking at the AfricaCom conference in Cape Town, MTN South Africa CEO Ahmad Farroukh suggested that, to develop a “win-win” ecosystem, where both mobile operators and OTT players benefited, a balanced cooperation between them was required.
“Collaboration between operators and OTT players has immense benefits for both parties … as it will enable the operators to leverage the wider capabilities of smartphones and enrich core communication services for existing subscribers, while continuing to invest in technology that provides the best customer experience for OTT users,” he explained.
Mobile operators would protect their customer base and revenue streams and there should be “no free ride” for OTT players.
“Mobile network operators and OTT players can either fight each other or opt to work in partnership to define access and structure a fair deal for both parties,” he said.
This echoed the sentiments of Telkom’s Dr Richard Majoor, who previously said a fair balance should be struck on the use of the operator-provided network that allowed the OTT business model to exist.
“Mobile network operators have made substantial capital investment in licensing and spectrum, acquiring and building their customer base and investing in building trusted brands. Operators have been catalysts and economic enablers and have contributed significantly to the fiscal budgets of many economies – all of this not to be shared for free,” said Farroukh.
A plan needed to be developed to protect the mobile operators’ investments while enabling OTT enterprises to “own the customer and make money in the future”.
“If the current ecosystem does not change, operators will lag behind in providing capacity for this access and then the game plan will change completely. OTT [players will], sooner or later, be charging for their services; their current revenues streams predict that,” he stated, adding that the “rules of engagement” needed to be defined.
Among the strategies he suggested was that operators charged for the value-added services and quality of service, as those that want a premium service were willing to pay a premium.
Telkom’s Siyabonga Mahlangu had previously said regulators should consider the impact of OTTs on existing operator business models and regulate OTTs directly to ensure their fair and proportionate contribution to the development of the ICT sector through means such as interconnection charges.
However, Farroukh warned: “If mobile network operators do not get it right with [the] OTT [players], sooner or later, they will become like the incumbent fixed networks that they themselves, the mobile operators, neutralised along the years.”
“Mobile network operators and OTT players should work together for their mutual benefit and for the benefit of their shared stakeholder – the end-user,” Farroukh said.
OTT players and mobile network operators, which should collaborate for the benefit of the end-user, should eye a bigger customer base and leverage global reach.
“This is where partnerships will play an important role,” he noted.