Investment

South African comms providers want financial support from OTT services

South African comms providers want financial support from OTT services

One of the continuing complaints of mobile network operators – that streaming and other online services are using their networks to help them make profits without compensating them – is back in the news in South Africa.

The country’s Association of Communications and Technology (ACT) says it wants over-the-top (OTT) services, such as Netflix, WhatsApp and YouTube, to contribute to network infrastructure costs in South Africa.

The ACT is an industry body comprising telecoms players such as Cell C, Liquid, MTN, Rain, Telkom and Vodacom.

It argues that the video, audio and messaging services OTT players offer compete directly against regulated service providers, but do not have to adhere to regulatory obligations.

The ACT is calling for these services to contribute to the costs of building and upgrading network infrastructure through what are known as ‘fair share’ or ‘fair contribution’ arrangements.

According to the MyBroadband news service, ACT CEO Nomvuyiso Batyi argues that new and better services and devices will continue to require ongoing network expansion and investment in upgrades. Network infrastructure in particular is a cost to which OTT providers should contribute, says ACT.

The ACT is calling for the development of a regulatory framework for OTT services under the South African Electronic Communications Act, along with proactive steps by the regulator to encourage investment by all market participants, together with greater collaboration and partnership across the ICT sector.

Most of the country's operators seem to agree with this argument, although Cell C apparently prefers constructive engagement to regulatory compulsion. However, it seems reasonable to argue that players like Netflix and YouTube consume a significant amount of bandwidth on South African networks without contributing to their upkeep.

And if ACT’s comments seem familiar, they should; we reported a similar complaint from the industry body in 2024. But it’s far from alone. The Indian operators association COAI has also raised this issue in recent years.

It’s also likely that this issue won’t go away; infrastructure investment demands on operators will grow with the ongoing take-up by consumers of 5G-enabled services. This is becoming a concern in both developed and developing markets.



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