Trai resists as telcos seek regulation of WhatsApp, Skype

Aug 18 2014, 07:55 IST
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It is estimated that Indian telcos may lose $3.1 billion in SMS revenues by 2016 due to the emergence of social messaging apps. It is estimated that Indian telcos may lose $3.1 billion in SMS revenues by 2016 due to the emergence of social messaging apps.
SummaryThere has been a sharp fall in mobile revenues due to increasing popularity of Internet apps.

Even as telecom companies lobby actively for Trai’s intervention to stem a sharp fall in mobile revenues due to the increasing popularity of Internet-based voice and texting apps, its chairperson Rahul Khullar told The Indian Express that he is “not keen” on proposing regulations.

However, the Telecom Regulatory Authority of India (Trai) has conceded to a “consultation paper” on regulating apps. “The consultation paper will test the ground to see how grave the problem is,” Khullar said, adding that it will only be released after preliminary discussions with all stakeholders. He also acknowledged that telcos have a “valid” concern regarding loss of revenue.

In a confidential white paper prepared earlier this year, the telecom industry had warned that a “perfect storm” of declining mobile revenues and increasing operator costs was imminent, as more users turned to products like Skype, Facebook messenger and Whatsapp. The Indian Express has access to the white paper prepared by the Cellular Operators Association of India (COAI), the industry representative.

A COAI representative said the white paper was solely for “internal circulation”, and was not submitted either to the Department of Telecommunications (DoT) or Trai.

It estimates that “Indian telecom operators may lose $3.1 billion in SMS revenues by 2016 due to the emergence of social messaging apps”. The paper suggests operators can respond in four ways — blocking these apps if regulators let them, adjusting their pricing to make apps less attractive, either by charging more for rival services that run on their networks or by making their own cheaper, or partnering with third-party apps.

The Trai Act allows the regulator to recommend measures to facilitate growth and competition in the telecom sector. But it can also lay down standards relating to the quality of service to be provided by telcos. The COAI white paper suggests this is a major issue regarding apps, “as the network is choked with high bandwidth services” and operators are “struggling to add capacity”.

Trai has not taken a stance on the principle of ‘network neutrality’, and it is not clear how the regulator will respond to instances where an Internet service provider has sped up or slowed down service from a particular app.

Recommendations issued by Trai in 2012 on “application services” suggested the issue of Net neutrality will be dealt with as and when required. That paper nevertheless acknowledged that telcos may give “low priority” to applications as regards those with

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