Global technology groups Microsoft, Google and Facebook strongly rebuffed arguments put forward by mobile operators on Tuesday that they do not pay taxes, did not provide their own infrastructure and were not worried about consumer service.
The companies hit back hard at mobile operators at a parliamentary meeting on Tuesday into whether so-called “over-the-top” services should be regulated in South Africa.
MTN and Vodacom have both argued that OTT providers need to be regulated in some way, if only to ensure that they are subjected to the same compliance rules as the networks. MTN went as far as to accuse the companies of not paying tax in South Africa.
Microsoft, Google and Facebook, all presenting at the parliamentary meeting, said the service they offered should not be seen as competing with those offered by the operators, but rather as revenue generators for them.
“We don’t get a free ride,” said Ebele Okobi, Facebook head of public policy for Africa. If anything, she said, the service offered by Facebook — it owns messaging service WhatsApp — generates revenue for operators.
She said from Facebook’s point view, it regards operators as partners with which it could develop a “symbiotic relationship”.
Okobi said telecoms providers and OTT companies operate in very different markets. Where carriers have high barrier to entries and have to deal with a lot of regulation, the opposite is true for OTT providers.
Google South Africa’s public policy manager, Fortune Mgwili-Sibanda, agreed. He suggested that instead of treating OTT providers like telecoms operators, operators should be treated like OTT providers. “Why go about putting the same cumbersome rules on new players?”
Mgwili-Sibanda went on to say that not only was it a myth that Google does not pay tax on the services it provides, it is willing to pay more tax if the tax review headed by Judge Dennis Davis changes the tax structure.
He said there is also no truth to the view that OTT providers do not build their own infrastructure.
He knocked the idea that OTT companies do not care much for customer service because the public is free to move to another provider with little effort.
For his part, Siyabonga Madyibi, representing Microsoft, does not see the point of the meeting called by parliament. He said that as there is not even a generally accepted definition of what OTT is, it could include services like dating sites and micro blogging site Twitter.
He warned that regulating OTT could come at high cost. Microsoft owns Internet voice services provider Skype. Madyibi said if it is forced to shut down, it would not impact Microsoft severely but would hurt the small business owners that depend on it.
From his point of view, the hearing only served one purpose: “We are here for one reason. To protect the revenue of mobile operators.” — © 2016 NewsCentral Media