Let’s be honest: When you hear that Vodacom and MTN in South Africa want WhatsApp and Netflix to pay for using their networks, your first thought is probably, “Mobile network operator (MNO) greed knows no bounds.”
After all, the mobile operators benefit from the success of these OTT (Over-The-Top) platforms.
However, like most things in telecoms, what sounds simple is almost never so.
Let’s unpack what’s going on, and why this idea to charge OTTs might make sense on paper but could blow up in our faces in practice, especially in smaller economies like South Africa or Zimbabwe.
Who’s eating all the bandwidth?
Netflix, YouTube, WhatsApp, TikTok , Facebook, of course. They account for more than half of global internet traffic, and the telcos aren’t happy.
Yes, the “Big 6” (Facebook, Amazon, Google, Apple, Netflix, and Microsoft) still generate almost half of all internet traffic, with Google and Netflix responsible for the largest volumes.
MNOs feel they’re paying for the networks, i.e. laying fibre, installing 4G/5G towers, keeping the lights on (thanks to load-shedding in countries like Zim and SA), while Netflix keeps streaming “Stranger Things” in 4K without paying a cent toward that infrastructure.
So, MNOs argue: “These OTTs should pay their fair share.” Again with the ‘fair share’ stuff. Having discussed the above, it’s reasonable, right?
Well… yes and no.
The case for charging OTTs
I know the MNOs lost the right to any benefit of the doubt in most people’s minds, but they kind of have a case:
- Infrastructure isn’t free. Someone has to pay for the millions (if not billions) needed to keep our towers on and fibre lines working. MNOs (Vodacom and MTN in this case) say they’re doing all the heavy lifting while Netflix chills.
- The traffic is a one-way lane. All that video content means way more data is flowing to users than from them. I’m sure you’ll concur that you consume more than you upload on the internet. However, this argument is weak. MNOs don’t actually make more money from upstream traffic either. Whether data is flowing in or out, most of us are paying the same for our bundles. It’s not like uploading your 4K dstupid dance challenges to YouTube sends extra dollars Vodacom’s way.
- Big Tech isn’t broke. Netflix, Google, Meta, these guys are making billions. It’s not unreasonable to ask them to spend a few million for the networks they rely on.
- South Korea’s doing it. In some countries, like South Korea, content providers were forced to pay. It hasn’t broken the internet yet.
Not quite a slam dunk though
“The first to state his case seems right, until his opponent begins to cross-examine him.” Proverbs 18:17 NET
Before we go chasing OTTs with an invoice, we need to hear the other side. Because there are some huge downsides.
Double-dipping. You and I already pay for our data. Charging Netflix too would be charging both sides for the same megabytes. It’s like paying to get into a concert and then the band being told to pay for using the stage.
Net neutrality stuff. If MNOs start charging OTTs, what stops them from throttling or blocking services that don’t pay? Imagine if Zimbabwean law requires WhatsApp to pay and they decide not to, that would almost certainly cause massive damage in the economy.
Startups would be doomed. Netflix can afford the bill. Our fellow Zimbos’ startup OTT apps? Probably not. If only the big boys can afford to operate, we might be stuck with Facebook and TikTok only.
Small countries have no power in these relationships. Netflix won’t care if Zimbabwe or Lesotho demands a $2 million access fee. They’ll just geo-block the country. We already pay extra for some services, now imagine having no WhatsApp because Econet/NetOne want a cut.
In case you forgot… MNOs benefit from OTTs
That’s the main thing that makes it hard to sympathise with MNOs in this argument. They make a killing from OTT-driven data usage.
Would people be buying 10GB bundles every month if it weren’t for WhatsApp, Facebook, YouTube and TikTok? Unlikely. OTTs are the reason people want mobile data in the first place.
In fact, many MNOs promote OTT use:
I found this in the archives. Here Econet was promoting the use of OTTs and it paid off because data usage has only been increasing over the years and revenue from internet usage is set to dwarf voice revenue in the next few years.
On the next one, NetOne wanted you to know you could have great experiences on YouTube, Facebook, TikTok etc. if you chose their network. Again, it worked. Today we use their networks to feed our social media addictions.
So now they want to charge the same OTTs they’re using as bait?
Remember, we’re talking about South African MNOs making these arguments but used local MNOs that we are familiar with to make the point.
Again, it’s like renting out a hall, selling tickets to fans, and then asking the band to pay for using the facilities, even though their music is the reason people bought tickets in the first place.
How will this end?
Some countries are trying out tiered contributions, only charging the Googles and Netflixes of the world, not every startup. Not likely to work for small countries though.
Others are encouraging infrastructure partnerships. However, Google and Meta already invest in undersea cables and data centres. So, they already put billions into the infrastructure that enables MNOs to offer internet services to us in the forst place.
Yes, MNOs need money to keep networks running. And yes, OTTs do rely heavily on that infrastructure.
But turning the internet into a road with toll fees, where only the richest platforms can pass through, is dangerous, especially for small countries.
At the end of the day, we all just want to watch a little YouTube without emptying the wallet.
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