OTTs vs Telco: South Africa enters the battle

Posted on January 18, 2016  /  1 Comments

India started in April 2015, when the regulator (TRAI) proposed rules for how application/content providers (Over the Top Players, or OTTs) should be regulated, taxed and treated (that  debate got sidelined in the battle over Facebook and FreeBasics, but that’s a different story).

Now it’s South Africa’s turn.  It seems that two operators are pushing for the regulator (ICASA) for regulation of OTTs, specifically that WhatsApp should be subject to local tax.  These are two of the bigger telcos that are asking for this.  Supporting their point of view of course are the national security hawks, who possibly don’t care about the tax, but want access to the OTT content (in this case, the content of WhatApp messages), and see this as the opportunity for catch-all regulation.

Defending a dominant market position (and one that arguably has been gained as through some level of regulatory capture) is classic behaviour of incumbents. In this case, it is interesting that the smaller player CellC has not taken the side of MTN and Vodacom, the larger players who are asking for the regulation.  In fact CellC is offering unlimited WhatsApp for a very low fee.

We will be watching this with interest.  Maybe the South African government will end up deciding that some OTT services are a substitute for traditional telcos, and therefore they should face similar regulation (e.g. Skype as a good substitute for voice calls on a mobile phone). They should then also be willing to accept the Skype ID of a citizen as the primary contact on all government forms, and not insist on a phone number, and run customer service via Skype.

1 Comment

  1. And Facebook has just made WhatsApp absolutely free!