Airtel Africa CEO calls for the regulation of Over-The-Top operators

Instant Messaging and Voice Over Internet protocol (VOIP) services, such as WhatsApp, Skype and Facebook (otherwise known as Over-the-top service (OTT ) need to be regulated to allow for a fair business environment with mobile phone service providers. Players in the mobile telephony services sector in Africa and around the world say OTTs are utilizing and profiting extensively from the infrastructure put in place by mobile network operators, and are fast degrading the revenues of the companies since they are eating into the companies’ core business, i.e. voice and text messaging services,” said Mr. Christian de Faria, Chief Executive Officer, Airtel Africa.

According to Mr. de Faria, the OTTs are not subject to taxation  by various governments on their service since they are seen as “ value addition services’ whereas they are conceptualized as unique business models, that are unfairly making billions while riding on existing infrastructure owned by other operators.  

“We are happy with the data revolution that is taking place, but new players are riding on our infrastructure and investment, and yet they are not subject to the same taxes and regulation regimes as operators. We expect regulators to help,” said Mr. De Faria.

The Airtel Africa CEO spoke during the 2015 International Telecommunication Union Global Symposium for Regulators in Libreville, Gabon where he challenged regulators to take action in building a structure that creates an equal playing field for all providers.

The conference, whose central theme is “Mind the Digital Gap – Regulatory incentives to achieve digital opportunities” runs from June 9^th to 11^th 2015, in Libreville Gabon. The conference brings together the leaders of international telecommunications companies and regulatory authorities to explore ways to drive consumer benefits from the emerging digital economy.

Mr. de Faria told delegates that OTT players are using operator platforms from which to offer services that cannibalize mobile network revenues. “Certain OTT providers understand both the issue as well as the need to work together to achieve a mutually beneficial solution,” commented de Faria. “We need each other.”

Mr. de Faria’s comments sparked a lively debate amongst regulators from around the world, highlighting the breadth and critical importance of the issue of determining the role and approach of regulators to ensuring fairness in a rapidly changing industry. The Airtel Africa CEO’s remarks were echoed by fellow panelist and operator Mr Bocar Ba​, Chief Executive Officer, Samena Telecommunications Council.

Regulators in attendance voiced a common position that no single country or regulatory entity can solve the issue on its own, but rather that a coordinated approach is required to establish a tariff framework that balances the rights of consumers and encourages innovation while rewarding investment in telecommunications infrastructure.

“Just like all the players in this industry, we seek to increase our footprint by offering our customers a wider range of products and services. However, we need a levelled playing field for all operators, as this will not only allow for equitable competition between over-the-top operators and telecommunications companies, but  will also ensure the investments required to deploy these technologies are viable,” he continued.

He added that regulators needed to step in and start treating mobile network operators as partners. To be successful, Mr. de Faria said, regulators should consider regulations for OTT players that cover licensing, spectrum, security and revenues. Should OTT services such as VoIP continue to grow, mobile network operators will be forced to charge their subscribers a premium fee to access the services.

“As network operators, we need OTT businesses as they help us reach a wider market, while conversely the OTT companies are dependent on our networks to thrive,” added Mr. de Faria.

“We are adapting our business models by offering products that incorporate OTT players because we don’t want to block them, but regulators need to ensure a level playing field for all. Ultimately, mobile network operators are seeking a win-win solution in which customers can benefit socio-economically from mobile connectivity,” said Mr. de Faria.