1. Telcos support differential pricing

Telcos support differential pricing

Telecom industry bodies COAI and Auspi have in response to telecom regulator Trai's consultation on differential pricing for data services stated that the government must allow it, as it is crucial to data growth.

By: | New Delhi | Published: January 9, 2016 12:24 AM

Telecom industry bodies COAI and Auspi have in response to telecom regulator Trai’s consultation on differential pricing for data services stated that the government must allow it, as it is crucial to data growth.

In a joint response to Trai’s consultation on differential pricing for data services, COAI and Auspi said India is a market where 80% of the population still does not enjoy mobile data services and so a flexible and progressive data tariff policy will lead to high mobile data services usage, which would translate into greater adoption of mobile internet and broadband services.

The COAI and Auspi said the roll-out of broadband services is at the inflexion of growth and therefore any tariff offering or pricing structure that boosts the internet ecosystem needs to be seriously considered and not prejudged and forbidden through a blanket ruling on grounds of inapplicable apprehensions of discrimination.

“Trai may examine a particular data plan of the operator and determine whether the tariff plan conforms to the above highlighted principles,” the industry bodies have said.

The two said telcos are already offering differential tariffs for various voice and SMS components and such differential tariffs for voice have only enhanced the affordability of telecom services. On the contrary, a uniform tariff for all types of calls would have increased the call rates in India.

The two also suggested that of R5 lakh crore required to fund roll-out of broadband and internet services over the next 3-5 years for the government’s Digital India Programme, 93% of the investment is expected to come from the private sector (largely from telecom companies).

“Telcos should be allowed to offer differential tariff for specific content/website, provided it is non-discriminatory. Currently, Internet-based companies are experimenting with various  marketing innovations and business models to promote their websites/platform/services and differential data service plans including zero rating can facilitate such marketing innovation/business models,” said COAI and Auspi.

Bharti Airtel in its response told Trai that the questions posed in the current Trai’s consultation paper are only confined to differential charging for web browsing (access of the internet through websites/applications) hosted by various content providers.

“They do not cover the differential charging based on content type such as VoIP (Voice Over Internet Protocol) and M2M (Machine to Machine). At present, there is a huge pricing arbitrage, of the order of 1:6, between VoIP (data services) and voice services,” Airtel pointed out.

Further Airtel said differential pricing is recognised both in law and by courts. “It is a well-established principle applied across sectors with respect to water, electricity, gas, railway etc”.

It said differential charging for VoIP is required to eliminate the arbitrage which leads to subsidisation of rich data customers using smart phones by the customers using voice through ordinary feature phone. “VoIP/OTT Voice also creates a non-level playing between licensed TSPs providing voice services and OTT Communication Service Providers providing same services. Therefore, we believe that any regulation on OTT communications and/or charging of underlying data services should follow the principle of “Same Service, Same Rules.”

It further contended that globally, differential tariff plans are quite popular and are not seen as anticompetitive or discriminatory to any content provider. “Some of the telecom markets which have encouraged differential tariff plans are Singapore, Hong Kong, Thailand, Malaysia, New Zealand, UAE, Bangladesh, and Philippines,” said Bharti Airtel.

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