By Myles Illidge
The Association for Communications and Technology (ACT) wants major streaming players like Netflix to pay towards South African network operators’ build and upgrade costs.
In August 2024, the ACT announced that it wanted to implement “Fair Share” arrangements to force over-the-top (OTT) players to contribute to network costs in the country.
OTT is a term used by telecommunications operators to describe services like Netflix, Disney+, Amazon Prime Video, and YouTube, which rely on telecom infrastructure.
MTN South Africa has told MyBroadband that it welcomes this fair share debate, saying that players in the space benefit disproportionately from network investments.
“While OTTs invest in undersea cables to deliver traffic to our network, MTN commits significant capital expenditure to build and maintain this infrastructure,” it said.
Vodacom told MyBroadband that network traffic has surged over the past few years, primarily driven by the demand for OTT services like Netflix.
“Despite substantial investments by telco operators, the demand for data has outpaced the sector’s ability to invest at a sustainable rate,” it said.
“To close the digital divide, it is evident that the connectivity ecosystem needs further investment.”
Vodacom noted that the greatest gap when it comes to access to digital services is network access in rural and underserved areas.
“It is also common cause that platform players are the drivers of traffic on the networks of operators,” it said.
“Operators have made an effort to make progress towards digital inclusion through social obligations, license fees, spectrum fees, and universal service fund contributions, over and above their capex commitment and contributions to the fiscas through taxation.”
Vodacom believes that network operators and platform services have crucial roles in network infrastructure investment.
“To this end, all relevant players need to ensure that an enabling ICT infrastructure is maintained and ideally expanded,” it added.
According to the ACT, OTT revenue generation is directly tied to network uses, and these platforms compete with service providers like Cell C, MTN, Telkom, and Vodacom.
“OTT providers heavily rely on the network infrastructure provided by network operators to deliver their services,” the ACT said.
It explained that OTT providers would contribute their fair portion to building, maintenance, and upgrade costs for the infrastructure supporting their operations through fair-share arrangements.
“This helps balance the utilisation of resources and prevents network operators from shouldering the burden alone,” it added.
To achieve this, the ACT wants to establish a regulatory framework for these players to help strike a balance between small and large network operators.
Moreover, OTT players’ contributions will ensure that network operators can consistently invest in network expansion, capacity upgrades, and service enhancements.
“This benefits all stakeholders and fosters a healthier marketplace,” the ACT said.
It also believes these interventions will incentivise network operators to invest in their network infrastructure.
It said that if network operators perceive that OTT providers aren’t contributing their fair share, this could discourage them from investing in infrastructure to support growing demand for OTT services.
“Fair compensation encourages continued investments in network development, leading to enhanced connectivity and better services for users,” the ACT said.
The contribution from OTT players will ideally be decided through mutual agreements based on usage charges, and the ACT notes that any arrangement should be grounded in law, commercial fairness, and a consideration of industry dynamics.
The ACT believes its proposed changes will result in higher-quality services for South African end users. It added that the country needs a flexible, non-disruptive, and coordinated approach to “building an information society.”
Achieving this will require clear regulations, innovative solutions, and close collaboration between regulators, OTTs, and network infrastructure operators.
“The goal is to create an enabling regulatory framework that is technology-neutral, treats similar services in a consistent manner, and fosters fair competition,” said the ACT.
