The South African telecommunications sector is advocating for technology companies to contribute to the expenses associated with network infrastructure development. This call to action comes in light of a report published by the Association of Comms and Technology (ACTforSA) on August 20, which highlights the pressing need for collaboration in funding efforts to expand and maintain robust network systems that are vital for enhancing internet accessibility and stimulating economic growth across the African continent.
The report, entitled “Promoting Equitable Participation and Sustainable Growth: Exploring Policy, Commercial, Competition, and Socio-Economic Perspectives in South Africa’s Over-the-Top (OTT) and Telco Ecosystem,” asserts that while technology firms are reaping significant benefits from existing telecommunications networks, they have yet to make a commensurate contribution to the associated costs of infrastructure development. “The prosperity of OTT platforms is inextricably linked to a strong network infrastructure,” stated Ms. Nomvuyiso Batyi, Chief Executive Officer of ACT. She further emphasized, “We believe that OTT platforms should participate in financing network enhancements and development initiatives.”
The ACT is advocating for the implementation of a “fair share” financial model that would obligate over-the-top platforms, including those offering video, audio, and messaging services, to assist in the funding of network construction, maintenance, and upgrades. As projected by Statista, the revenue in the African OTT video sector is anticipated to reach an impressive $3.90 billion in 2024, with an anticipated compound annual growth rate (CAGR) of 8.30% from 2024 through to 2029, culminating in an expected market value of $5.81 billion by 2029. Notably, despite this substantial financial growth, these platforms currently contribute little to the costs of network infrastructure.
The rapid expansion of OTT services exacerbates their dependency on existing telecommunications networks, subsequently intensifying the financial strains on telecom operators charged with the responsibility of establishing and upholding the necessary infrastructure. In order to sustain this evolution and ensure equitable participation in the growing digital economy, it is imperative that OTT companies recognize and fulfill their financial obligations toward network infrastructure.
In conclusion, the urgent appeal from South Africa’s telecommunications industry underscores the necessity for a collaborative approach to network funding. By implementing a fair share model, all stakeholders can contribute to the enhancement and sustainability of vital telecommunication infrastructures, ultimately benefiting the broader economy and society at large in the digital age.
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