South Africa’s leading mobile operators Vodacom and MTN, want big internet companies such as Netflix to pay them for using huge volumes of data traffic over their networks.
According to the telecommunication giants’ argument, they spend a large part of their revenue developing infrastructure that “over the top” (OTT) service providers like Netflix benefit from “disproportionately”.
In an interview with TechCentral, MTN Group CEO Ralph Mupita said, “We support the policy direction.”
“The OTTs will say we help you (the operators) invest in subsea cables and all that, but the reality is they are not putting 18% of their service revenue into capex like we are. They maybe put in 0.5%. They are getting a disproportionate benefit,” Mupita said.
Vodacom Group CEO Shameel Joosub said, “The OTT fair play discussion centres on [the idea] that these guys (OTT companies) have destroyed the revenue of telecoms operators, but we have to build all the infrastructure. Fair play says you can use the network, but you have to pay for it. 5G is a disaster in Europe because the telcos are not making money anymore,” Joosub said.
According to TechCentral, “the operators concerns is that they are under pressure to increase their infrastructure spend while providing more value to customers at lower cost.”
While speaking to TechCentral regulatory advisor for the Internet Service Providers’ Association (Ispa), Dominic Cull said the association does not have an official position on fair play.
But speaking in his personal capacity, he said, “the argument that big internet companies are not contributing their fair share towards infrastructure development is on shaky ground given that Google and Meta Platforms, for example, have invested significantly in undersea cables around Africa.”
“It is a nuanced debate,” Cull said. “As a starting point for ISPs, there is a little bit of resistance [to supporting the telecoms providers] because that (fair share) is not what they have done in the past. OTT is just another word for competition and consumers benefit from that.”
Body of European Regulators for Electronic Communications (Berec) said, “There is no evidence of ‘free-riding’ along the value chain. ISPs’ customers buy internet connectivity and pay for sending and receiving traffic. Costs for deploying and upgrading the access networks are typically covered by payments from ISPs’ customers.”
Source: TechCentral.co.za
