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2007-03-08 - MTN to charge for Skype, MXit
MTN customers using its airwaves to conduct free phone calls over Skype or to send text messages using MXit may be hit by huge bills if the operator opts to outlaw the services that are clogging its network and depleting its own revenues.
The cut-price calls and messages are enormously popular with computer users who go online using MTN’s high speed data cards.
Skype lets computer users make international calls through Voice Over Internet Protocol (VoIP) technology. A call to another computer user who has installed Skype is free, and calls can be made from a computer to a land line or cellphone for a small fee.
Likewise, the MXit service developed by Cape Town entrepreneur Herman Heunis lets its 3,27-million users send text messages for a fraction of the price of an SMS.
Neither service soaks up much bandwidth in isolation, but they have become so popular the combined effect is inflicting network overload.
MXit claims its subscribers send 116-million messages every day. That makes a direct dent on the cellular operator’s profits, by giving users a cheaper alternative to SMS. One user was astonished when the bill for his monthly voice and data package soared R1000 because heavy use of Skype and MXit pushed him well above the amount of data traffic he pays for.
A typical MTN package lets users download 1GB of data for R400 a month, which works out at 39c/MB. Users who exceed the limit pay an “out of bundle” data rate of R1,20/MB.
But if MTN decides to invoke the fine print in its contracts, they will pay far more. Anyone caught using Skype or a similar service would be whacked with a charge of R21,93/MB, excluding VAT.
MTN’s small print points out: “In terms of the current regulatory regime in SA, these tariffs and technologies may not be used to transfer or generate VoIP traffic. Should it be found that VoIP traffic was carried over the MTN network using these tariffs or technologies, MTN reserves the right to cancel the agreement that you have with MTN. You will also be charged retrospectively at R21,93/MB (VAT excluded) for any VoIP traffic transferred by such means.”
So far MTN has not applied that punitive tariff, but may do in the future.
“Services such as Skype and MXit have congested the network and have affected the quality of the service that we can offer our customers,” says media relations manager Ravin Maharaj.
“If that traffic is to co-exist with normal internet and e-mail data traffic, we will need to consider implementing differential tariffs for these protocols to ensure sustainable performance of our data network.”
Since there is no difference in the cost of carrying data or voice over the internet, the rate MTN has built into its contracts to penalise Skype users is an entirely artificial creation, says one industry commentator.
“The mobile operators have two choices with VoIP calling. Either they stand before the waves like King Canute and tell the waves they are jolly cross about things and will say bad words to them. Or they can embrace it,” he says.
Because the services are so much more economical than traditional cellular services, their growing popularity is inevitable, he says. The UK cellular operator 3 is one of several to offer cellphones with Skype preinstalled and ready to use.
MXit director Darryn Foster says it is up to the operators to decide what to charge, but he is concerned that MTN may decide to clamp down. However, since MXit is a text service it falls outside the R21,93 fee that MTN’s contracts propose for VoIP.
Vodacom also sells high speed data cards to connect computers to the internet, but its contracts do not single out any services as possible targets for higher prices. If data users remain within their monthly allowance there is no extra fee for using Skype or MXit, even though those services erode Vodacom’s potential profits. Users who exceed their limit pay R1,20 for every extra megabyte.
Chief communications officer Dot Field says Vodacom does not offer voice calls over the internet itself as the technology was not of a high enough quality. “However, Vodacom allows VoIP on the network and deems it just another data stream, similar to sending e mails or browsing the internet. Our standard data rates apply.”
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