African mobile operator MTN has called for collaboration between MNOs and over-the-top (OTT) players. MTN CEO Ahmad Farroukh, speaking at the AfricaCom event in South Africa, said that cooperation is required to develop a win-win ecosystem, as operators cannot be in complete control of the internet, and a broadband pipe that lacks appealing content and applications means little to end users. Farroukh said that mobile network operators and OTT players can either fight each other or opt to work in partnership to define access and structure a fair deal for both parties. He suggested, for example, that operators charge for value-added services and quality of service. Those that want a premium service will be willing to pay a premium, Farroukh said.
He told delegates that mobile operators need to put a plan in place to avoid being forced into the role of providing a “dumb pipe,” investing to provide the network infrastructure while allowing OTT providers to own the customer and make money in the future. To be truly successful, according to Farroukh, OTT players and mobile operators have to each look beyond their own customer base and leverage global reach. He said that partnerships will play an important role in this process. Strategically positioned OTT players cooperating with mobile operators can also deepen the relationship between customers and the operator brand, build loyalty, reduce churn and help improve the customer value proposition.
A little over six weeks ago, Ahmad Farroukh sounded a more combative note in remarks delivered to reporters. In late September, he characterized the relationship between OTTs and MNOs as “unfair,” in that the latter spend large amounts of money creating and maintaining mobile networks that OTTs then use to take business away from them. He criticized South African competitor Cell C’s decision to offer its customers free data for OTT messaging app WhatsApp, arguing that such a strategy amounts to giving away the store. Without giving specifics, Farroukh seemed to calling for MNOs to exact some sort of concessions from OTTs in return for access to their networks, without actually denying them access.
Now, the MTN CEO appears to have backtracked to some extent, emphasizing cooperation and partnership between MNOs and OTTs rather than the application of pressure (a strategy that Tarifica also advocated in recent remarks delivered at the Pricing Mobile Data Conference in London). Perhaps he has come to accept that MNOs do not really have enough leverage to really fight OTTs and is urging conciliation rather than combat. However, reading between the lines a little bit, his latest remarks can be construed as being in no fundamental way inconsistent with what he said earlier. While cooperation and co-branding may help save MNOs from inhabiting the “dumb pipe” role, MNOs, Farroukh says, should nonetheless charge OTTs for “quality of service.” If they can indeed get OTTs to pay some sort of premium for access to premium network speeds and bandwidth, they will have made progress toward redressing the imbalance of fairness that Farroukh alluded to previously.