The Association for Communications and Technology (ACT) is advocating for significant streaming services like Netflix to contribute to the expenses associated with building and upgrading South African network infrastructure.
In August 2024, the ACT introduced the idea of “Fair Share” arrangements, which would require over-the-top (OTT) providers to assist in covering network costs within the country.
OTT typically refers to services such as Netflix, Disney+, Amazon Prime Video, and YouTube, which depend on telecommunication infrastructure.
MTN South Africa expressed its support for this debate, highlighting that OTT players disproportionately benefit from the investments made in network infrastructure. “While OTTs invest in undersea cables to facilitate traffic to our network, MTN allocates substantial capital to construct and maintain this infrastructure,” the company stated in a conversation with MyBroadband.
Similarly, Vodacom shared its insights, noting an increase in network traffic driven by the popularity of OTT services like Netflix. “Despite our significant investments, the demand for data has outpaced our capacity to invest sustainably,” Vodacom reported.
The company stressed that the digital divide is most pronounced in rural and underserved regions, calling for more investment in network access.
“It is widely recognised that platform providers contribute significantly to the traffic on operators’ networks,” Vodacom affirmed, mentioning the various efforts made by operators toward digital inclusion through social obligations and licensing fees.
Vodacom emphasised the importance of a collaborative approach between network operators and platform services to maintain and expand vital network infrastructure.
According to the ACT, the revenues generated by OTT providers are closely linked to their use of network services, putting them in competition with local service providers such as Cell C, MTN, Telkom, and Vodacom.
The ACT argued that OTT providers should contribute fairly to the costs of building, maintaining, and upgrading the infrastructure upon which their operations depend. This would ensure a more equitable distribution of costs and prevent network operators from bearing the financial burden alone.
To facilitate this, the ACT aims to create a regulatory framework supporting large and small network operators. Contributions from OTT services would enable network operators to consistently invest in infrastructure enhancements and expansions, leading to a healthier competitive environment.
The ACT pointed out that if network operators feel that OTT providers are not sharing their costs fairly, it might deter future investments in infrastructure needed to meet the growing demands of OTT services.
“Fair compensation is essential for encouraging ongoing investments in network development, resulting in improved connectivity and enhanced services for users,” stated the ACT.
Ideally, the actual contributions from OTT players would be determined through negotiations based on usage charges, with all agreements grounded in legal and commercial fairness while considering industry dynamics.
The organisation believes these proposed modifications will enhance service quality for end users in South Africa and advocates for a flexible, non-disruptive, and collaborative approach to developing an information society.
Achieving this vision will require clear regulations, innovative strategies, and close cooperation between regulators, OTT providers, and network infrastructure operators. “We aim to create a regulatory environment that is neutral to technology, treats similar services consistently, and promotes fair competition,” concluded the ACT.
