/ 13 October 2015

MTN chief wants probe into ‘freeloading’ WhatsApp

Cellphone operator MTN has fired a shot at popular chat application WhatsApp, claiming the popularity of chat over the top (OTT) operators was creating an uneven playing field.

“You have these players which are getting huge benefits out of an industry without making any investment. How do we level the playing fields?” chief executive Mteto Nyati told Fin24.

Facebook-owned WhatsApp has grown in popularity in SA, replacing Mxit and BBM as the most popular chat application on smartphones.

Market tracker App Annie reveals that WhatsApp is the top downloaded application in South Africa, followed by Facebook Messenger, Facebook and Instagram.

Call for Icasa probe
“What have these over the top players invested in South Africa? Zero,” said Nyati.

MTN will have invested R10-billion into its network by the end of 2015 and will invest R6-billion in 2014.

Nyati called for the Independent Communication Authority of South Africa (Icasa) to investigate OTT operators.

“Where we would like the regulator to be playing is making sure the playing fields are level between us, the network operators and the over the top players.”

Despite repeated efforts to contact Icasa for comment, officials from the regulator were unable to comment on whether or not they would conduct an investigation.

Facebook revealed it was showing significant growth in its three key African markets of South Africa, Kenya and Nigeria.

There are 7.3-million daily active users in SA, but almost all of them (7-million) visit Facebook on a daily basis from mobile devices.

Huge revenues
The giant social network reported revenue of $4-billion in the second quarter, up from $2.9-billion in the same period in 2014. WhatsApp recorded revenue of $15-million.

Twitter posted revenue growth of 61% to $502.4-million in the second quarter of 2015, but that still translates to a loss of $136.7-million.

“You have to regulate them because clearly they’re making a huge amount of revenue on top of the infrastructure that the operators have paid for. Somehow they have to contribute towards the building of this infrastructure,” Nyati argued.

A typical SMS in SA costs around 80c for less than 50KB of data, while lower end data bundles cost between 25c and 60c per megabyte. According to the GSMA, emails cost between 10KB and 50KB in data.

Nyati rejected a suggestion that zero-rated SMS would convince people to abandon OTT chat providers.

“Even if you make SMS zero, it doesn’t mean that people will stop using the other one.

“My view is that those services have been designed in such a way so they are so customer friendly. The fact that they end up being zero-rated is a different matter, but if you look at the uptake of WhatsApp, it’s so easy for the customer,” he added.

Nyati hinted that he was open to negotiations with OTT providers on how they could contribute to the network.

“We need to find a way of working with those players because they are providing services that our customers are looking for. We just need have an arrangement that is beneficial for both parties.– Fin24