Internet of Things
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Two recent stories from Morocco and South Africa highlight the significant impact OTT players are making on communication markets across the world. In Morocco the national regulator, the ANRT, has explicitly permitted telcos to start blocking VoIP calls via applications such as Skype and WhatsApp. In South Africa legislators have started an extensive debate on how to readjust the regulatory framework in light of the rise of OTT services. It is noteworthy that these issues are arising in emerging markets just as they are in mature markets, but regulators still have a long way to go before they find the right way to approach them.
Regulators in some emerging markets are up to speed with – or even ahead of – their counterparts in mature markets on this issue. This shows how profound the impact of OTTs has been on these markets, and hence on revenue streams of traditional players, in recent years.
Many regulators in the world are seeking to protect consumers and enshrine the principle of net neutrality and openness. Not only has the ANRT in Morocco backed initiatives by telcos to block VoIP calls via applications such as Skype and WhatsApp, it has also issued a press release explicitly stating that VoIP telephony, like traditional telephony, can only be offered in the country by firms that obtained a license as network operators, as established by a decision issued by the regulator in 2004. As a consequence, operators not only can, but must, block such VoIP calls. The ANRT mentions the negative impact of these services on operators’ revenues in its announcement, which shows the regulator’s intention to be on the operators’ side, protecting them from disruptive forces that can threaten their position in the market.
The Moroccan case can be seen as an extreme example of a regulator acting against OTTs. Nevertheless, regulators around the world are tackling the issue of re-scoping communications services in light of the rise of OTT communications. In South Africa policy-makers are starting to debate policy and regulatory options in parliament and the national regulator, ICASA, will soon launch an enquiry into the impact of OTT VoIP services on the communications market. At a meeting held by the South African parliament’s committee on telecoms on January 26, 2016, stakeholders presented their views, covering topics such as the cost to communicate, inequality of access, security and privacy, and net neutrality – with particular regard to the practice of zero-rating. These issues closely resemble those recently debated in other countries such as India and Switzerland, as well as those raised in the recent consultation run by the European Commission as part of its review of the regulatory framework for communications.
Despite the common acknowledgment that OTTs are changing the market’s landscape, and the fact that some changes to existing frameworks will be needed, regulators are yet to devise viable solutions. One of the main obstacles regulators still see is in the difficulty of enforcing regulation on OTTs, which are often based outside the country in question. In addition, burdensome regulations might ultimately be too restrictive for small companies and hamper the innovation OTTs have brought to the market. In the coming years, regulators are likely to experiment with different approaches before they can identify the most sensible ones.
Digital Economy 2025: Telecoms Regulation, TE0007-000960 (December 2015)
“Regulators are now considering OTTs’ impact on communications markets,” TE0007-000964 (December 2015)
Luca Schiavoni, Senior Analyst, Regulation
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