Uruguayan Operators Will Not Back Call to Regulate OTT Apps

Uruguayan Operators Will Not Back Call to Regulate OTT Apps

Uruguayan operators Antel and Claro have distanced themselves from a call by José Pedro Derregibus, CEO of Movistar and president of the industry association Camara de Telecomunicaciones for government regulator Ursec and tax office DGI to impose the same conditions on OTT apps such as WhatsApp as it does on mobile operators. Antel CEO Gustavo Delgado told the newspaper El Observador that his company does not support the proposals, which are aimed at reducing the use of OTT apps. Claro said in a press statement that Derregibus’ recent remarks were made on his own behalf rather than on behalf of the association. It added, “Claro is not in favor of or against regulation of WhatsApp. For now this is not a issue that occupies the company and it is not part of its agenda.”

Tarifica’s Take

Ever since the explosive growth of OTT apps such as WhatsApp and Skype began, mobile operators have resented the fact that these entities are making money from the use of MNOs’ networks without making any investment in those networks themselves. To make matters worse, the services these companies provide compete directly with those offered by the mobile operators—text messaging and now, in many cases, voice calling. By calling for regulators to impose more stringent conditions on OTTs and to treat them more like MNOs, Mr. Derregibus is expressing a sentiment that is widespread among his colleagues. However, at this particular moment his own company, as well as two other major operators in the country—state-owned Antel and América Móvil-owned Claro—are distancing themselves from his position.

Although we cannot be certain of their reasons, it appears to us that operators have become entwined with OTTs to the point where placing restrictions on the latter is likely to harm the revenue streams of the former. Mobile customers, presumably in Uruguay as in many other markets, are such heavy users of OTT apps that these apps account for a large proportion of mobile traffic. In addition, limiting the operations of OTTs—especially WhatsApp, a form of social media that has built up a community of its own—could seriously alienate customers. While treating OTTs more like MNOs may seem like simple justice, at this point, it may be bad for business. While the MNOs are not directly opposing Derregibus’ statement, they are not backing it, either.