O’BRIEN CALLS FOR REVENUE SHARE BETWEEN OTT OPERATORS, GOVERNMENTS AND TELECOMS PROVIDERS
Friday 21st July 2017 - Kingston, Jamaica: As regional policy makers in the CALA region grapple with how to deal with the disruptive nature of the on-line digital services on tax revenues, Digicel’s Chairman, Denis O’Brien, impressed upon regulators the critical importance of creating a level playing field for all players in the digital world – including OTT operators, Governments and telecoms providers.
O’Brien was speaking to an international audience of regulators from over 60 countries at the 17th Global Symposium for Regulators (GSR), held in Nassau, Bahamas, from 11th to 14th July.
During his pointed presentation at the leadership debate segment on Drivers of Digital Transformation, O’Brien highlighted that new developments in artificial intelligence, virtual reality, algorithms and robots are changing the world in ways that one could never have imagined until recently. As such, the ‘unregulated’ nature of the internet has been credited with much of this innovation that has happened.
“The days of a couple of guys working out of a garage are long gone, and the internet and the digital age it supports are now dominated by a handful of giant corporations.”
Keeping it interesting, O’Brien took a jab at the so-called ‘internet giants’ in attendance at the event, saying, “Giants such as Amazon, Facebook, Google and Skype have argued from the outset that they should be exempt from local in-country regulation. They believe there should be a ‘Cloak of Regulatory Invisibility’ just for them while the rest of us in the telecommunications industry must obey the law and build networks.”
He then contrasted the approach of these internet giants with traditional telecoms operators, noting that unlike them, telecoms operators have to buy telecoms licenses, pay for spectrum, VAT, sales taxes and USO levies as a percentage of revenues. And to this he cautioned that, “The tax base in developing countries with small economies is very narrow, and more and more the burden of ‘chief-tax collector’ is falling on telecoms operators. The public policy imperatives for regulators are therefore very important.”
O’Brien also highlighted the impact that the online advertising funded model of internet providers is having on traditional media; “Politicians should realise that if the local media goes out of business - if they cannot afford to pay for real journalism, if all you have is fake news - then the net result is that democracy becomes seriously fragile.”
The UN Broadband Commission has an objective to come up with a strategy and recommendations under a ‘new deal’ where Governments, telecoms operators, regulators and OTTs all come together to bring broadband to 4 of the 7 billion people who do not have it today. And in this regard, O’Brien reminded the global audience that; “A huge amount of capital investment is needed in broadband networks of developing nations. Drones, balloons and other flights of fancy will not cut it!”
O’Brien closed his presentation by stating that; “As part of any ‘new deal’, all network providers – whether they are telecoms operators or anyone else – need to be given a revenue share from advertising and OTT services so they can fund broadband networks in the most rural parts of Africa, the CALA region and South East Asia,” therefore urging policy makers to “do the right thing.”