OTT - Threat or opportunity for African Telcos?

Christoph Stork, Steve Esselaar and Chenai Chair

Telecommunications Policy, 2017, vol. 41, issue 7, 600-616

Abstract: This paper analyses the transition from the voice and SMS era of mobile telephony to the data-only era, and the strategies that operators have adopted during this transition phase. Key drivers for the transition are Over the Top services (OTTs). The paper uses quarterly prices for prepaid user baskets across 44 African countries and introduces an alternative tool to measure and compare top-up bundles. Prepaid voice, prepaid data and top-ups are analysed, to demonstrate the various strategies operators in Africa have adopted, in response to revenue loss caused by OTTs, such as Facebook, WhatsApp and Skype. Case studies of dominant operators in South Africa, Kenya and Namibia are used to highlight which strategies have successfully defended or increased mobile operator revenues. The paper shows that embracing OTTs, and providing prepaid products that resemble flat-rate pricing (top-ups with limited validity), is the most successful strategy for mobile operators to retain revenues. The paper also shows how zero-rated OTTs can be used to gain market share for new entrants. We argue that regulators should resist the push for regulating OTTs, and instead facilitate the evolution to flat access pricing.

Keywords: Telecommunication regulation; Mobile broadband; Over the top services; Mobile operators (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:telpol:v:41:y:2017:i:7:p:600-616

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DOI: 10.1016/j.telpol.2017.05.007

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