New Delhi/Mumbai: Indian telecom services providers have long grumbled that messaging services from companies such as WhatsApp, now a unit of Facebook Inc., are eating into their revenue.

Now, in a case of “if you can’t beat ’em, join ’em", the world’s fifth-largest telco by subscribers and India’s biggest, Bharti Airtel Ltd, on Tuesday became the first provider in India to launch a free music streaming application for the local market.

The application, called Wynk, allows users, regardless of the operator, to stream, download and buy music from Bharti Airtel’s library of 1.7 million songs that it has access to through partnerships with firms such as Universal Music.

For now, the ad-free app is primarily aimed at smartphone users with a third-generation, or 3G, connection but it is available for any phone user with an Internet connection. Bharti Airtel subscribers will not be charged for the data they use when using the app (only for the content) and can also change their caller ring back tones using the app, the company said in a statement.

Around 35-50 million of Bharti’s 200 million phone users are smartphone users.

Telcos typically argue that applications such as messaging services eat into their revenue, while the latter counter that the applications drive greater data usage, and hence bring more revenue for the telcos.

This has prompted the Telecom Regulatory Authority of India (Trai) to look into the regulation of messaging, video and phone call service providers like Skype and WhatsApp after many telcos complained that the playing field was skewed against them. A senior Trai official said that the regulator is in the midst of understanding the ecosystem of such services and will decide in the next few days whether there is a need for regulation.

Such services are currently unregulated and the service providers do not pay any fee to operate in the country. India’s telcos, on the other hand, argue that they have to pay more than 30% of their revenue as taxes.

According to data shared by PricewaterhouseCoopers’ managing consultant Neeraj Kataria, it is estimated that Skype, which offers free phone and video calls on the Internet, is costing the telecom industry around $36 billion a year globally.

According to a 23 June report by researcher International Data Corp. (IDC), the growth rate for voice services revenue in Asia-Pacific excluding Japan has been slowing from 2012 and will do so till 2017, achieving a compound annual growth rate (CAGR) of 2.5%.

However, data connectivity or mobile broadband revenue will grow at an annual average pace of 19.3% in the same period, primarily due to cheaper smartphone penetration, rollout of 3G and LTE (long term evolution or 4G) licences, and the so-called ‘Over-The-Top-Players (OTTP) services.

OTTP refers to delivery of instant messaging, video, audio and other media over an open Internet/broadband connection directly to the user, without the need for carriage negotiations and without any infrastructure investment on the part of the provider.

A 24 July report by research firm Gartner Inc., forecast that mobile connections in India will grow to 815 million in 2014, an 8% increase from 755 million connections in 2013.

The report said that though India’s share in worldwide mobile connections is growing, it comprises a very small percentage of global mobile services revenue because the voice average revenue per user (ARPU) is falling very rapidly, and the increase in data ARPU is not able to fully compensate for the decline.

The report also listed the growing appetite for OTT services as one of the biggest challenges faced by Indian mobile operators. It added that operators that engage with popular content and service brands and bundle their apps and services with their data plans will drive consumer interest in mobile broadband.

With millions of users around the world downloading free mobile messaging apps to chat in real time, the 21-year-old habit of paying telecom services providers to send text messages is declining.

US-based WhatsApp is the clear market leader with more than 500 million active users, of which about 50 million are in India.

According to a 22 April post on the WhatsApp official blog, “half a billion people around the world are now regular, active WhatsApp users. In the last few months, we’ve grown fastest in countries like Brazil, India, Mexico, and Russia."

WhatsApp is expected to launch a free calling feature soon.

WeChat from China-based Tencent Holdings Ltd isn’t too far behind WhatsApp. On 13 August, Tencent said that WeChat had 438 million monthly active users during the second quarter of 2014, up 10.6% from 396 million the previous quarter.

Nimbuzz, which was founded in the Netherlands but now claims to be fully developed out of India, does not release its official numbers but is estimated to have more than 150 million users. Hundreds of other chat apps are spawning in the apps world, including KakaoTalk from South Korea, Line from Japan, Taiwan’s Cubie, Zalo from Vietnam and LoveByte from Singapore.

Smartphone makers have their own apps too, such as BlackBerry’s Messenger, Apple’s iChat and Samsung Electronic Co. Ltd’s ChatOn.

Hike is a home-grown effort, an app backed by Bharti SoftBank (BSB), a joint venture between Bharti Enterprises Ltd and Japanese operator SoftBank. The app was launched in December 2012 and has over 35 million users, according to a 27 August release.

PTI contributed to the story.