Trai decides to reduce scope of regulation for WhatsApp, Skype
Telecom operators, who once cried foul, are now seeing rising data consumption because of such apps
New Delhi: The Telecom Regulatory Authority of India (Trai) has decided to reduce the scope of consultation for the proposed regulatory framework for over-the-top (OTT) communication platforms such as WhatsApp and Skype.
Telecom operators, who once cried foul over the regulatory imbalance, are now seeing rising data consumption on their networks because of such apps, according to the regulator.
This may result in less regulation on such apps than previously demanded. Telecom operators had alleged a non-level playing field, as operators were subjected to regulatory levies and licensing conditions, while these apps were not.
OTT refers to applications and services that are accessible over the internet and ride on operators’ networks.
“We have reduced the scope of that paper. We have already issued recommendations on net neutrality and previously on differential pricing. Now, very few issues are left with respect to OTT. We have to look at regulatory imbalance (with respect to telecom operators). But telecom operators themselves are saying that OTTs are helping data consumption,” said a senior Trai official, requesting anonymity.
This will be the second time that the regulator will seek views on regulating over-the-top players. In March 2015, it had floated a consultation paper on whether over-the-top players offering voice, messaging and video call services through applications, should be brought under the licensing regime, and whether over-the-topgrowth was affecting the traditional revenue stream of operators, among other issues.
At that time, however, revenue from voice calls accounted for a relatively larger share of a telecom operator’s revenue. Things changed after the September 2016 entry of Reliance Jio, which offered free voice calls and cheap data, forcing operators to match its offerings.
Voice continues to be an important source of revenue, operators are now focusing more on data. For instance, in the April-June period, the average revenue per user (ARPU) from voice was ₹73 for Idea Cellular, while data ARPU was ₹82.
“Operators are now happy that data consumption is happening through WhatsApp. WhatsApp calls ride on data and cost very little in terms of data usage. In any case, most telecom operators are giving unlimited free voice calls. So the arbitrage opportunities are reducing day by day,” said the official cited above.
Earlier, operators had alleged that the lack of regulation around over-the-top apps distorted the level playing field as a telecom operator had to pay interconnect usage charges for landing calls on the other operator’s network, while WhatsApp calls are totally free and were eating into their revenue streams by taking some traffic away from their network.
Operators earn revenue solely from increased data usage on account of these apps, while over-the-top providers make use of the operator’s infrastructure to reach their customers, and offer services that not only make money for them, but also compete with voice calls offered by operators.
“It is true the issue around revenue loss has reduced with most operators offering free voice calls. Operators do earn revenue from data being consumed, but they also have to make significant investments on their networks to be able to carry these huge amounts of data. We want same service same rule. If these apps are not subjected to levies on revenue that they earn, then that should apply to us also. Apart from this, there should be a level-playing field when it comes to legal enforcement,” said Rajan Mathews, director general, Cellular Operators Association of India (COAI).
When Telecom Regulatory Authority of India had issued recommendations on net neutrality in November 2017, it had said that it would initiate a separate consultation process on questions relating to regulating over-the-topservice providers, including over-the-top communication services.
“This work will build on the information collected by the authority in prior consultations, and include an investigation into questions relating to the potential market failures in that segment, the appropriate tools to address those failures and the costs and benefits of any possible regulatory interventions,” TRAI had said in November. It added that the inputs that have already been received in response to the March 2015 consultation paper will also be considered while examining these issues.
Editor's Picks »
- Jet Privilege can actually get higher valuation than Jet Airways
- Profitability of cement firms to take a hit due to weak prices, high costs
- Pidilite’s shares hold their ground despite weak rupee and rising crude
- Automobile sector shares trip on rising risks to earnings growth
- Steel companies are taking a shine to their home market