New Delhi: India’s telecom regulator is considering whether communications services such as WhatsApp, Google Duo and Skype should be subject to regulatory and licencing norms that are similar to the ones applicable on telecom operators. The Telecom Regulatory Authority of India (Trai) on Monday invited comments on regulating so-called over-the-top (OTT) service providers, which have so far been unregulated.

This is the second time Trai has sought views on regulating these communication apps.

In March 2015, Trai floated a consultation paper on whether apps offering free voice, messaging and video call services were affecting the traditional revenue stream of operators and whether the apps should be brought under a licensing regime.

At that time revenue from voice calls accounted for a relatively larger share of a telecom operator’s revenue. Things have changed after the September 2016 entry of Reliance Jio Infocomm Ltd, which offered free voice calls and cheap data, crimping the profits of its larger rivals and forcing smaller operators to exit the industry.

Trai’s latest consultation paper is seeking views on whether the regulatory imbalance is impacting investments in telecom networks for capacity expansion and technology upgradation and how over-the-top service providers may participate in infusing investment into the networks.

“Since 2015, OTT services have witnessed a significant increase in adoption and usage. Technologies and networks for delivery of such services have also evolved during this period.

The demand for examination of regulatory imbalance between OTT players and telecom service providers need to be taken up in this context," the telecom regulator said in the paper.

An OTT provider offers information and communication technology services, but neither operates a network nor leases capacity from a telecom operator. Instead, it relies on the global internet to reach the user, hence going ‘over the top’ of a telecom operator’s network.

While OTT companies provide services similar to those of telecom operators, they do not require any permission from regulators or any commercial agreements with telecom operators.

OTT service providers are also not bound by any regulatory obligations to address consumer concerns. These issues are being addressed through a self-regulatory or market driven approach such as providing an option to report and block unwanted messages and calls and periodic feedback from the customer about the quality of voice calls.

Telecom operators have in the past complained that the regulatory regime is unfair and sought a level-playing field.

The regulator, in the latest paper, has also sought views on which service provided by an OTT service provider should be regarded as the same or similar to a service being provided by the telecom operator and whether inter-operability among OTT services and inter-operability of their services with telecom operator’s services promote competition and benefit users.

“The rise of big multinational OTT players coupled with strong network effects in this space has also led to concerns pertaining to abuse of dominance. Non-interoperability among different OTT services causes network effect with lock-in," the Telecom Regulatory Authority of India said.

“In such situations, an OTT service user cannot exit from a particular service and opt for another, which introduces stickiness that creates a barrier to competition. At present, there are no regulations for interoperability between OTT platforms, and large OTT players exploit this lacuna by switching off access to rival companies on devices and operating systems."

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