Whatsapp, BBM, Mxit and the likes are popular applications that nearly everyone, if not everyone who has a smartphone has on their mobiles. With these applications, you are sure to send much more messages to co-users at rates that are very insignificant compared to the rates you would have incurred if sending on the original plans put in place by network operators as regards SMS. At a rapid pace therefore are these over the top (OTT) applications replacing the rate and need for sending SMS.
Although these OTT apps may find favor with us as they appeal to our pockets, they are highly detrimental to the revenue growth of telecommunications companies who gain less and less on SMS with each growth of these OTTs. MTN has thus taken it upon itself to call out WhatsApp for investigation over what it believes to be ‘unlevel playing around between the OTT and Mobile Telecomms operators’
The argument provided by MTN is to a very large extent, valid. These mobile telecommunications companies invest a lot into a country’s economy and build a lot of infrastructure to get to where they are, while the OTTs on the other hand just come in to capitalize on the already available infrastructure.
“You have these players which are getting huge benefit out of an industry without making any investment. How do we level the playing fields?” MTN CEO Mteto Nyati questioned. “What have these over the top players invested in South Africa? Zero.” an angry Nyati told Fin24.
Whatsapp, which was picked by Annie Mobile App Tracker as the most downloaded application in South Africa, posted a revenue of $15million without having to pump any revenue into economies. MTN on the other hand would have invested about R10bn into their company’s growth by the end of 2015 business year. This is what sparked the outrage.
MTN has suggested that it is open to negotiations with these OTT app-controlling bodies on ways in which they could make the playing ground level and make sure that they also give back to the networks whose infrastructures they’re building on.