The Association of Comms and Technology (ACT) in South Africa is advocating for digital content and service providers, commonly known as over-the-top (OTT) platforms, to contribute financially to the rollout and maintenance of network infrastructure.
Nomvuyiso Batyi, CEO of ACT, said these digital Internet platforms generate a significant portion of internet traffic, making their success heavily dependent on robust and reliable network infrastructure, Reuters news report said.
Ericsson Mobility Report said 5G subscriptions in Sub-Saharan Africa in 2029 are anticipated to exceed 320 million, accounting for 28 percent of all mobile subscriptions, from 11 million in 2023.
Data traffic per smartphone in Sub-Saharan Africa is forecast to reach 20 GB per month in 2029 from 5 GB per month in 2023. Total mobile data traffic in Sub-Saharan Africa is forecast to reach 13 EB per month from 2 EB per month in 2023.
Nomvuyiso Batyi emphasized that OTT providers, who deliver digital content such as video, audio, and messaging directly to consumers, should contribute to the costs associated with network upgrades and expansion. “What we’re saying is that the OTTs should contribute towards the network upgrades, the network building,” Nomvuyiso Batyi stated.
The industry body argues that “fair share” arrangements would ensure that OTT providers contribute to the costs of building, maintaining, and upgrading the infrastructure that supports their services. This would not only balance the use of resources but also incentivize network operators to continue investing in infrastructure to meet the growing demands of digital services.
ACT, in a paper published on Tuesday, highlighted the significant financial burden on mobile operators such as Vodacom Group and MTN Group, which spend up to 41 billion rand ($2 billion) annually on expanding their networks.
MTN Group, which has accelerated its investment in networks, reported Capex (ex-leases) of R13.4 billion with Capex intensity of 14.8 percent in Q2 2024. MTN Group had 288 million subscribers that include 150.2 million data subscribers.
The paper suggests that contributions from OTT providers should be determined through mutual agreements on usage charges, though it acknowledges the complexity of calculating these costs fairly.
Ralph Mupita, CEO of MTN Group, cautioned against overly punitive measures, noting that the tech sector has already contributed to sub-sea cable investments across the continent. He argued for a balanced approach, where some of the investment could be considered operational expenses rather than capital expenditure.
ACT is calling for a collaborative approach to regulating OTT service providers, bringing them under the same licensing and policy regime as network operators in South Africa. This, according to the industry body, would ensure fairness and sustainability in the rapidly growing digital services sector.
Baburajan Kizhakedath
