News Column

OTT apps could impact low-income users

July 14, 2014

Bonnie Tubbs

MTN and Vodacom's terms and conditions reserve the right to charge special rates for VOIP traffic.

Significant uptake of over-the-top (OTT) voice services could lead to steeper call rates, negatively impacting lower income consumers who do not own smartphones, says Vodacom.

The operator SA's largest by customer numbers says while OTT services "are not having a material impact on revenues at this stage", if significant user volumes move to OTT routes and normal voice volumes decline, this could change and lead to escalated prices.

Vodacom spokesperson Richard Boorman explains that, because the cost of providing voice services would be divided by fewer calls if increasing numbers migrated to mobile voice over IP (VOIP) services like Viber, Skype and BBM Voice for example mobile termination rates could need to be hiked.

"This, in turn, it could be argued, would mean that lower income consumers who don't have smartphones are negatively impacted."

Boorman was responding to recent news that Jamaica's operators, Digicel and Lime, have started blocking VOIP-based OTT apps. Digicel said in a statement last week that it viewed unlicensed telecoms providers' use of its network to deliver services as "illegal bypass activity".

Cellular News ( cites Digicel CEO Barry O'Brien as saying OTT apps like WhatsApp and Skype erode voice and text revenues an issue unique to the telecoms industry.

Boorman says there is definitely an argument to be made that OTT players are effectively offering a mobile service without being licensed. Asked whether Vodacom was in discussions around OTT apps and how to mitigate the effect their use may have on its revenues, he says the company is "keeping an eye on developments in this area".

Mike Fairon, GM of products and solutions at MTN, says the company embraces OTT players and has only blocked services on its network as part of certain fair use policies within specific product terms and conditions, like BlackBerry Internet Services.

October 2006 (../index.php?option=com_content&view=article&id=118231), controversy erupted around MTN and Vodacom's moves to charge premium rates for use of VOIP services. At the time, MTN said it had filed with the regulator for a tariff of R25 per MB for VOIP. The operator said it had the right to either block VOIP or charge the R25 per MB tariff.

Goldstuck notes that because of the "negative public relations" the move led to, neither operator pursued the option of premium-rating VOIP although, to this day, their terms and conditions allow them to either throttle or charge more for the service.

"None of the operators are doing it as far as I know, but they are permitted to limit or throttle different services and charge differential rates but they have to disclose it."

This morning, Fairon said MTN welcomed the healthy competition OTT apps bring into the market. "MTN doesn't underestimate the impact of OTT players."

For more stories covering the world of technology, please see HispanicBusiness' Tech Channel

Source: ITWeb

Story Tools Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters