Debate intensifies over OTT contributions to telcos' network costs

Nomvuyiso Batyi, CEO of the Association of Comms and Technology, says they are encouraging industry stakeholders to collaborate. (Photograph by Lesley Moyo)

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The debate about over-the-top (OTT) players' contribution to telco network upkeep and spectrum costs has gained momentum in recent weeks.

In an ITWeb TV interview,  ICASA chairman Mothibi Ramusi said that anyone using someone else’s infrastructure 'ought to contribute'. He pointed out that this is his personal opinion, acknowledging the issue is complex and requires all parties to work together to find a fair solution.

Following the interview, we conducted a poll to gauge public opinion on the matter. The results showed a split: 42% believe OTTs should pay telcos directly, 40% oppose any financial contribution, and 18% support taxation.

As the debate continues, the Association of Communication Technology of South Africa (ACTforSA) has called for collaboration and balanced solutions to address the issue.

"We are currently in the process of developing the second phase of opinions on this matter. As outlined during the launch of our initial paper, our aim was to initiate the discussion and propose potential solutions. We are not setting minimum standards at this stage, but rather encouraging industry stakeholders to collaborate in finding a solution that serves the best interests of South Africa's digital economy," said ACTforSA CEO Nomvuyiso Batyi.

The white paper titled "Promoting Equitable Participation and Sustainable Growth: Exploring Policy, Commercial, Competition, and Socio-Economic Perspectives in South Africa's Over-the-Top (OTT) and Telco Ecosystem" was launched last month.

The white paper states that the success of the OTT service model depends on the availability of high quality, reliable, and efficient network infrastructure.

ACTforSA recommends that South African policymakers and regulators work with both network operators and OTT service providers to gather data on the impact that OTTs have on both regulated and unregulated services to ensure fair competition, innovation and customer welfare.

Batyi stresses the need to consider the broader ecosystem. "The issue of OTT contributions is still at an early stage of discussion, and we invite diverse perspectives in shaping solutions. It's important to approach this topic with balance, considering the sustainability of South Africa's digital economy. While some may believe OTTs should not contribute, we believe it's crucial to consider the broader ecosystem, where all players — telecom operators and OTT platforms alike — benefit from shared infrastructure. A balanced solution should ensure fairness while promoting innovation and growth in the sector."

When asked about financial models for OTT contributions to network infrastructure rollout, Batyi said ACTforSA envisions commercial agreements between OTTs and telecom operators, with regulatory oversight to ensure transparency and fairness.

"The financial models that emerge would be negotiated between OTTs and network operators through official legal channels. Importantly, these agreements will be tailored to our unique South African context, balancing the need to foster relationships with both multinational and local OTT players, while ensuring the interests of the end-user are prioritised." 

She added that a collaborative approach is key to achieving a fair and sustainable outcome for all stakeholders. These agreements could be based on network usage or infrastructure development, promoting collaboration between OTTs and network operators.

"The goal is to ensure that contributions support the ongoing expansion of infrastructure, especially in underserved areas. These models are especially crucial in the current context, where clear regulatory and legislative guidance on OTT contributions is lacking. In the absence of formal mandates, these agreements would still require buy-in from key regulators such as the Competition Commission, ICASA, and the Information Regulator.

 Their involvement would help ensure that these financial structures are both competitive and compliant with existing regulatory frameworks, while also fostering a collaborative environment that benefits the entire digital ecosystem," Batyi said.

While a definitive timeline is challenging to set, ACTforSA aligns its proposals with ongoing legislative and regulatory changes. 

The timing will depend on how quickly these changes happen and the readiness of industry players to collaborate. 

However, ACTforSA warns that inaction could result in a misalignment between regulatory frameworks and technological advancements, leading to a lag in infrastructure development and potentially compromising the competitiveness of South Africa’s digital economy.