WeChat’s Brett Loubser on why Africa’s mobile operators have to change their attitude to OTT companies

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Africa’s mobile operators and Over-The-Top (OTT) companies have moved in together but not yet worked out a way to live with each other. The mobile operators both want the love and interest OTT operators bring them. But in the main they can’t quite give up their defensive stance about what they feel should be their home. Russell Southwood talked to ex-mobile employee Brett Loubser, Head of WeChat Africa.

South African Brett Loubser has spent most of his working life in the mobile industry, both with device manufacturers (Samsung, Nokia and HTC) and nine years with MTN managing its product portfolio. He’s not an outsider from an OTT company looking in but someone who, in his own words has, “an understanding of how the operator works.”

So why doesn’t the relationship between mobile operators and OTT companies work?:”The current deals (particularly the one Facebook is offering) don’t make sustainable sense for operators. They’re building a user base for OTT providers.” When I say I think it’s second and third tier operators looking to increase subscriber numbers, he responds:”You take customers away from the number one operator. You achieve this, then what?”

He’s also critical of Internet.org for offering a platform that effectively cuts out all but selected OTT companies and content providers:”It starts to cut out participation altogether.” In effect, Facebook is creating a mini “walled garden” with its approach (see interview link below with Nicola D’Elia, Facebook for how they see their strategy.)

He makes the point that increasingly mobile operators will compete on content and service products:”Technically, mobile operators are exactly the same. Ultimately the customer decides and it will be on the uniqueness of your product option.”

“The idea of making OTT services has great appeal. If you look at trends for every operator on earth, there’s great growth in data. But operators have got to think what they do when they provide an OTT service for free...Operators have to have sustainable partnerships.”

Of course, free actually means free at the point of delivery as someone has to pick up the data access costs. As Nicola D’Elia, Facebook told us back in October last year:
“The balance of costs vary between ourselves and the operators. They can help us reach non-Facebook users and provide technical support and we can provide insights at the aggregated level.”

As a company owned by Naspers, which is so dominant in the Pay TV market, there is perhaps some kind of “zen slap” operating that they find themselves the insurgent challenger on this one. Isn’t it a case of “he would say that, wouldn’t he?”

Whilst this accusation can inevitably be raised, it’s worth seeing past it. The mobile operators need to build expensive infrastructure to make money on data, not necessarily subsidize data use to the advantage of one player.

For as the mobile operators start to lose the title of the “new incumbents”, some of the OTT players like Facebook and Google are maybe going end up with this mantle. As the world needs more than Facebook as its network function and Google as its search engine so Africa needs a more diverse set of competitive OTT players. The global big guys need to be chased by other contenders, particularly local contenders.

So are the tier one mobile operators signing up to WeChat?:”We are cautiously optimistic and positive. These are difficult conversations to have…It’s a big decision and it will take them some time.”

But when I ask whether the mobile operators bureaucratic product structure where you sell to head office and then have to sell to every opco is fit for purpose, he replies:”You’re 100% right.” But he makes the point that there is now “a sense of urgency from the operators…OTT makes sense for the first time ever.” However, it’s hard to argue with the broader point he makes:”Mobile operators are not good globally at launching in-house products in a big way.”

So what has We Chat got that Facebook hasn’t? Loubser describes it as a social communications platform rather than a networking platform. Its social feeds are designed to be private and are not available to anyone (except those you choose):”There’s a shift towards personalized messaging from social products. This type of messaging is different. It’s about going from broadcast to individualized.”

It has interesting levels of functionality including “layers for transaction” and tools to speak to business in a private way. It’s also built a relationship with Gareth Cliff’s Cliff Central, the web radio “unradio” in South Africa.

It’s currently focused on building a significant presence in South Africa and Nigeria and if that goes well, will roll out in other countries where there are high levels of smartphones.

Watch the players make the arguments by looking at the two video clip interviews below:

Brett Loubser on how WeChat Africa is both a radio station and a second screen

Nicola D'Elia on Facebook as an "on-ramp" for Africa's first-time Internet users

Digital Content Africa: Balancing Act’s web TV channel Smart Monkey TV has launched a new e-letter called Digital Content Africa. On a fortnightly basis, it will cover online film, music, publishing and services and applications. We have already produced 32 issues and these can be viewed on this link:

Essential reading for those in mobile VAS to anyone just interested in what African and relevant international content they can now get online. If you would like to subscribe, just send an email to info@balancingact-africa.com with Digital Content Africa in the title line. Some examples of past issues below:
Tanzania’s Ubongo broadcasts edutainment to 7-12 year olds using an interactive multimedia strategy with TV, mobile and internet

Everybody knows that the dice are loaded and that the deal is rotten…Operators not opening mobile channel for Africa’s digital content makers

Digital Content Africa Z26: Africa’s coming digital content generation – Market research from 3.5 countries looks at music, TV and film use

Videos interviews to watch:

Syed Karim, Outernet on a satellite media distribution service to reach people in unconnected areas

Arun Nagar on Mziiki, a music and video streaming service for African content

John Dada on the challenges of using broadband for development in a northern Nigerian town

Eban Oliver, Skyroomlive on livestreaming top African music acts in concert to the world

Nyasha Mutsekwa, Aflix on selling Hollywood movies for US$2.99 in 31 African countries

Olivier Laouchez, Trace: Launching world's largest music talent competition with Airtel - Target? 2 m entrants

Kyle Lindeque, Go Metro on an app that provides live updates to South Africa's commuters

Jo Crawshaw, Opera Software on using data compression to allow African users to view video

Siya Metane (aka Slikour) on creating a text-based African solution to music downloading

Pascal Schmitz, iBiskop on overcoming the three barriers to downloading: bandwidth, price & piracy

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