Significant uptake of over-the-top (OTT) voice services could lead to steeper call rates, negatively impacting lower income consumers who do not own smartphones, says Vodacom.
The operator - SA's largest by customer numbers - says while OTT services "are not having a material impact on revenues at this stage", if significant user volumes move to OTT routes and normal voice volumes decline, this could change - and lead to escalated prices.
Vodacom spokesperson Richard Boorman explains that, because the cost of providing voice services would be divided by fewer calls if increasing numbers migrated to mobile voice over IP (VOIP) services - like Viber, Skype and BBM Voice for example - mobile termination rates could need to be hiked.
"This, in turn, it could be argued, would mean that lower income consumers who don't have smartphones are negatively impacted."
Boorman was responding to recent news that Jamaica's operators, Digicel and Lime, have started blocking VOIP-based OTT apps. Digicel said in a statement last week that it viewed unlicensed telecoms providers' use of its network to deliver services as "illegal bypass activity".
Cellular News cites Digicel CEO Barry O'Brien as saying OTT apps like WhatsApp and Skype erode voice and text revenues - an issue unique to the telecoms industry.
Boorman says there is definitely an argument to be made that OTT players are effectively offering a mobile service without being licensed. Asked whether Vodacom was in discussions around OTT apps and how to mitigate the effect their use may have on its revenues, he says the company is "keeping an eye on developments in this area".
Mike Fairon, GM of products and solutions at MTN, says the company embraces OTT players and has only blocked services on its network as part of certain fair use policies within specific product terms and conditions, like BlackBerry Internet Services.
Grey area
ICT veteran Adrian Schofield says it seems SA's network providers are having a hard time accepting the transition from telephony to digital telecoms. "We could argue that they are only trying to protect their predatory pricing of voice and text services, when the reality is that they do nothing different, whether they are carrying voice, video or data."
He notes Skype has been around for a long time now, and other providers are seeing the opportunity of the VOIP/text market. "[SA's operators] will have to adapt. It will not be possible to turn back the clock. The key driver for sustainable revenues will be the quality of service, whatever is being carried."
Schofield says it is up to the regulators to keep up with changing technology and ensure licensing conditions are technology neutral, so that the needs of users are not prejudiced by out-of-date thinking.
World Wide Worx MD Arthur Goldstuck says OTT remains a grey area in telecoms. "Net neutrality says you can't favour one form of traffic over another, but that said, it's fairly well established that networks can block what they regard as traffic that compromises their business."
At this stage, however, it is WhatsApp that poses the biggest threat, says Goldstuck. Skype and other VOIP services have yet to see significant mobile uptake in SA. SMS, on the other hand, is all but dead on a consumer to consumer basis, he notes.
Cell C and Telkom Mobile had not responded to requests for comment by the time of publication.
At a premium
In October 2006, controversy erupted around MTN and Vodacom's moves to charge premium rates for use of VOIP services. At the time, MTN said it had filed with the regulator for a tariff of R25 per MB for VOIP. The operator said it had the right to either block VOIP or charge the R25 per MB tariff.
Goldstuck notes that because of the "negative public relations" the move led to, neither operator pursued the option of premium-rating VOIP - although, to this day, their terms and conditions allow them to either throttle or charge more for the service.
"None of the operators are doing it as far as I know, but they are permitted to limit or throttle different services and charge differential rates - but they have to disclose it."
This morning, Fairon said MTN welcomed the healthy competition OTT apps bring into the market. "MTN doesn't underestimate the impact of OTT players."
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