Mobile operator Cell C has come out swinging at its competitors, saying Vodacom and MTN’s attempts to have “over the top” mobile services such as Whatsapp and Facebook regulated, would stifle innovation and investment.

MTN has been vocal in recent months about its concerns that OTT services such as Whatsapp were eating into its voice-call profits by allowing people to communicate cheaply, piggy-backing on multibillion-rand investments by mobile network operators to extend their data coverage.


Yesterday, parliament’s portfolio committee on telecommunications and postal services heard arguments from players and experts in the industry on whether these OTTs should be subjected to the same regulations as mobile networks. Also of concern was the high cost of data in South Africa and the prohibitive cost of SMSes, which the committee heard were “completely overcharged and overpriced”.

Committee chairman Mmamoloko Kubayi said reports that interactions had been as a result of lobbying by the service providers were incorrect. She said she had noticed at several ICT conferences that the matter of OTTs was being raised as a point of concern.

Both MTN and Vodacom came out in full support of similar regulatory control of OTT providers.

Corporate services executive for MTN, Graham de Vries, said regulations would ensure that consumer details were protected from being sold and would allow the government to intercept messages “on very reasonable grounds” and gather taxable income. Vodacom’s executive for regulatory affairs, Dr Andrew Barendse, said though the company did not want the services shut down, it was in favour of regulations being imposed on companies offering “similar or competing services”.

Cell C chief legal officer Graham Mackinnon said MTN and Vodacom were “hiding behind” regulatory issues of security and safety.

“We are opposed to any more regulations on OTT services. They will stifle innovation and investment. South Africa will fall behind if we pass protectionist regulation.

“It’s a bit rich that Vodacom and MTN are calling for a level playing field when they have been fighting Cell C’s efforts to level the playing field since it entered the market.”

Dr Alison Gillwald, executive director of Research ICT Africa, argued that “old-fashioned competition regulation of new services that opened up the internet to the poor needed to be guarded against.”

“We need to think very carefully before we regulate.”

Gillwald also pointed out that the “free” services such as Whatsapp, Google Hangouts, Facebook messenger and Skype all required data- bought from the mobile operators.

She said these services were driving increased data usage across all the networks.

All three major networks reported increased revenue from data in 2014, with Cell C – which has taken a stance to partner with Whatsapp and Facebook to provide free or subsidised access to these services – reporting a 106% increase in the amount of data used in 2014.

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