South African Telcos Push for Streaming Platforms to Contribute to Network Costs

South Africa’s leading telecom operators, Vodacom and MTN, are advocating for major streaming platforms like Netflix and YouTube to contribute to network costs, citing the immense strain these services place on telecom infrastructure.

The Association for Communications and Technology (ACT) is championing a “Fair Share” model, which would require over-the-top (OTT) service providers to help finance network maintenance and expansion. According to ACT, streaming platforms derive substantial benefits from existing telecom networks while telecom operators bear the costs of sustaining and upgrading infrastructure.

MTN and Vodacom, key backers of this proposal, acknowledge that OTT platforms invest in undersea cables, but argue that the real burden of maintaining local networks falls on telecom operators. Vodacom emphasized that surging data consumption driven by video streaming is outpacing their ability to invest in network expansion at a sustainable rate.

A central concern is connectivity in rural areas. Vodacom pointed out that network providers already fulfill obligations related to digital inclusion through social commitments, licensing fees, and taxes. However, given that streaming services are the dominant drivers of internet traffic, telcos argue that they should also share in the responsibility of funding network expansion to underserved communities.

ACT contends that OTT platforms generate significant revenue while relying on telecom networks to deliver their services, making it imperative that they contribute to infrastructure costs. A proposed regulatory framework aims to ensure fair distribution of network expenses across both large and small operators, fostering a balanced digital ecosystem.

Failure of streaming giants to participate in funding network development could lead to reduced investment in infrastructure by telcos, potentially hampering connectivity improvements. ACT asserts that fair financial contributions from OTT services would incentivize further investment in network advancements, resulting in improved internet access and service quality for consumers.

To achieve this, ACT emphasizes the need for well-defined regulations, industry collaboration, and a structured approach that promotes fair competition and sustainable growth within South Africa’s telecommunications landscape.