JOHANNESBURG, Gauteng — A major debate has emerged in the local telecommunications sector as South African telcos demand OTT platforms like Netflix, WhatsApp, and YouTube contribute financially to the upkeep of the country’s network infrastructure. Led by the Association of Communications, the industry argues that the massive surge in digital traffic necessitates a new funding model. However, digital marketing strategist Mongezi Mtati suggests that while the pressure is understandable, the focus must ultimately remain on adapting to modern consumer behaviors rather than just policing the “pipes.”
The Telco Argument: Funding the “Pipes”
The Association of Communications, an industry body representing major local operators including Vodacom, MTN, Telkom, Cell C, Rain, and Liquid, has mounted intense pressure on global Over-The-Top (OTT) technology platforms. The core of the telcos’ argument is that OTTs generate the vast majority of internet traffic—ranging from streaming and voice notes to video calls—while reaping significant advertising revenue. Meanwhile, traditional telecommunications companies argue they are losing out on legacy voice and SMS revenues while bearing the heavy capital expenditure of maintaining the physical networks that make these services possible.
The Strategist’s Rebuttal and the Road Analogy
Despite the intuitive nature of the telcos’ pitch, Mtati points out that this perspective overlooks the evolution of digital infrastructure. He notes that many local networks were originally built for voice calls and text messages, not the high-bandwidth data streaming of today. Consequently, traditional business models have failed to keep pace with shifting consumer behaviors.
To illustrate this, Mtati compares the situation to the government building a road between Richards Bay and Gauteng and subsequently demanding that truckers pay a toll. While the analogy highlights the infrastructure cost, it simplifies the reality that users now traverse the “digital road” in entirely different ways, utilizing smaller, data-driven vehicles rather than the heavy traffic of the past. Furthermore, Mtati notes that telcos have already offset legacy losses by successfully selling data packages to consumers who previously relied solely on traditional television like DSTV.
The Rise of Fiber and the Experience Economy
The battleground for connectivity has also shifted. Mtati highlights that the most significant growth in recent years has been in Fiber to the Home (FTTH), particularly within township areas where residents are increasingly recognizing the value of high-speed connectivity. Interestingly, the companies dominating this FTTH space are not necessarily the legacy telecom giants of 15 or 20 years ago, but rather newer, agile businesses.
This shift underscores a critical reality: consumers do not buy a network or a brand; they buy an experience. Whether it is the smartphone they use or the platform they log onto to connect with loved ones and colleagues, the quality of the digital experience dictates consumer loyalty.
Global Precedents and the Reality of Enforcement
When asked if South African mobile network operators can force the hand of multinational OTTs, Mtati’s answer is a definitive no. Globally, the issue remains unresolved and highly contentious. In the United States, shared commercial value models are utilized, while South Korea experimented with a “sender pays” model in 2016, which ultimately proved messy. Meanwhile, European regulators debated the concept but halted midway. In the West, OTTs have largely only been compelled to contribute after being taken to court. In the South African context, Mtati notes there is no evidence of direct, amicable deliberations currently taking place between local telcos and global tech giants.
The Path Forward: Innovation and Government Intervention
Instead of forcing infrastructure levies, the opportunity lies in enhancing the user experience. Telcos are already employing strategies such as zero-rating specific platforms and offering data discounts to attract and retain users. If a network provides a seamless experience for WhatsApp or streaming, users are more likely to remain on that network for other services.
Finally, the role of the government remains a wildcard. While government intervention could potentially create policies or taxes compelling OTTs to contribute to the national fiscus—a welcome prospect for a state seeking new revenue streams—Mtati warns that any commercial agreements must not come at the expense of the consumer. The ultimate victory for both telcos and OTTs lies in providing affordable, high-quality access to data, ensuring that as data consumption inevitably grows, the consumer remains at the center of the digital economy.
