Why MTN hates WhatsApp
MTN South Africa boss Mteto Nyati has called on industry regulator Icasa to “level the playing field” between operators and over-the-top (OTT) services like WhatsApp.
“You have these players which are getting huge benefit out of an industry without making any investment,” Nyati told Fin24.
“What have these over the top players invested in South Africa? Zero.”
In contrast, MTN will have invested R10 billion into its South African network by the end of 2015.
Nyati’s comments raise a number of questions about the kind of benefits WhatsApp is getting out of MTN’s subscribers, and how much WhatsApp has cost MTN. These questions were put to MTN:
- How much revenue has WhatsApp made in South Africa?
- What has WhatsApp cost you in revenue in the past year?
- How do you view operators such as Cell C zero-rating WhatsApp services on its network?
- How is this different to MTN zero-rating services such as Twitter?
MTN provided the following statement in response to our questions:
MTN believes that operators and OTTs can co-exist within a mutually-beneficial relationship. MTN is committed to establishing an amicable relationship with OTTs.
The network was asked follow-up questions to establish why Nyati believes WhatsApp should be investigated, but MTN did not provide further comment.
However, an analysis of MTN’s annual reports from 2009 to 2014 provides a clear picture of why the company is unhappy with WhatsApp.
MTN South Africa SMS revenues 2009-2014.
As the graph above shows, MTN has seen significant declines in SMS revenue since 2012, with a 10.1% decrease in 2013 followed by a 16% decrease in 2014.
Its 2014 SMS revenue was the lowest since 2010.
Looking at the financials for MTN group, the declines are even larger – with SMS revenues shrinking from R8.2 billion in 2012 to R4.5 billion in 2014.
WhatsApp, which replaces the need to use SMS by allowing messages to be sent over a data connection, is using the operator’s data network against it – which is why MTN has complained about the service’s lack of infrastructure investment in SA.
This is hardly a new phenomenon, and highlights the tension between the argument for net neutrality and open-access networks, and operators taking issue with OTT players that compete with their core services.
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