Africa's operators welcome OTT players as opportunity to grow

CAPE TOWN--Over the top (OTT) players are here to stay and present an opportunity for mobile operators to acquire users and drive network usage.

That was the view of Africa-based operators who, in a panel session at the AfricaCom conference here, were asked if OTT players are a threat or an opportunity.

"We want to do anything that helps our users," said Arthur Bastings, EVP of Africa at Millicom, which has commercial operations across Africa and Latin America. "We very much support it."

Bastings also insisted that it is "probably not the right time now" to talk about service cannibalisation: "That conversation is still five years out," he said, noting that, although users in Africa may be consuming OTT services, they are also still consuming SMS, voice minutes and other core operator services.

He added that it is very early days for the Internet in Africa, noting that smartphone penetration is still below 20 per cent in his customer base.

Christian de Faria, CEO of Airtel Africa, also took a pragmatic approach, noting that there is no point in operators burying their heads in the sand and engaging in what he described as mediaeval practices such as blocking or throttling OTT services. "They are here to stay," he said. "The consumer wants the product."

De Faria said his company is now looking at ways to monetise such services and wants to work with the likes of Facebook to achieve this aim. Indeed, Airtel Africa is already working with Facebook on the latter's Internet.org initiative in Zambia, and now Kenya.

Ahmad Farroukh, the CEO of MTN South Africa, was even more enthusiastic about the OTT opportunity, saying that what he hears from Facebook today "is music to my ears.

"We do not want to block social media," he said, adding that now is the time to work out how to cooperate better to benefit both the OTT provider and the operator.

Airtel's de Faria commented that the relationship with the OTT player is now really evolving. "We saw OTT players as the beast, and we were the beauty," he said, in a more humorous take on the situation. "Now the beauty and the beast are coming together."

However, despite the warm words about acceptance, collaboration and cooperation, there is clearly much work to be done in order to achieve complete harmony. For one thing, the operators all stress that they have no intention of becoming dumb pipes, meaning that they also fully intend to engage in offering their own services and not just supporting usage of Facebook, Twitter, YouTube and other web services.

For example, Millicom's Bastings said the company does not see itself as a pipe but as a broadly focused organisation with a strong convergence strategy.

Marc Rennard, executive vice president for Africa, Middle East and Asia at Orange, also warned that there are still inherent tensions in the relationship between OTT providers and operators, as consumers pay the operators to use services such as Facebook.

He further pointed to some very specific problems in Africa, such as the need to improve the affordability of services and handsets and reduce high levels of taxation on ICT services and devices.

Related Articles:
Facebook to launch Internet.org in Kenya
Juniper Research: Operators to lose $14B in revenue to OTTs this year
GSMA: Mobile subscribers in Sub-Saharan Africa will pass 0.5B in 2020
Analysys Mason: Sub-Saharan Africa telecoms' fastest-growing market
Report: European operators missing out on €2.2B OTT profit opportunity

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