Sunday, September 27

MTN reveals reason behind Whatsapp outlash

It was just over a while ago when MTN called out Whatsapp for allegedly having not invested in the South Africa economy in a tale that resembled one of reaping where they (Whatsapp) did not sow. MTN accused Whatsapp of not investing anything into the infrastructure of the country but otherwise building on the already available infrastructure.

It was on this note that the CEO of MTN, Mteto Nyati, has called for Icasa to make the playing grounds “level” for both MTN, other service providers and these Over The Top (OTT) applications. Although this outlash might seen unfounded, MTN really had reasons to be angry at the way Whatsapp is ripping it off of some benefits, especially having invested to the tune of R10 billion in its South African arm of cooperation only by the time curtains have been brought down on the 2015 business year.

Looking into this, MTN has provided a graph which showed how their SMS services has fared over the years and how revenue has been generated likewise. The graph shows a steady climb from 2009 – 2011, with some type of negligible change seen in the 2011 – 2012 year after which the SMS revenues began to suffer a steep drop.

For example, a 10.1% decline was seen between the years 2012 and 2013 and by the time 2014 would end, there had already been a further 16% decrease.

These declines were mainly due to the fact that people now chose to send their texts via these OTTs such as Whatsapp, leading to loss of revenue and decline for providers such as MTN. Now we understand why MTN is mad at Whatsapp.

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