1. Trai must take a call on value-added services

Trai must take a call on value-added services

In the tiff between VAS providers and TSPs, customers are offered differential pricing for content and are deprived of innovation

By: | Published: May 4, 2016 5:26 AM

With regulation in place to curb “differential pricing of data based on content”, the debate on intranet versus internet is heating up. So, why is this debate happening today? Because telecom service providers (TSPs) want to leverage their position by offering content to customers on an exclusive basis. On the other hand, there are content providers—value-added service (VAS) providers—who wish to offer content directly to customers of all TSPs, but cannot do so as they don’t have direct access to the customer.

If VAS providers are allowed to have direct connectivity with TSPs, then they can seek connectivity with each and every access provider on terms fixed by the regulator. This will ensure that all VAS operators, big or small, get equal access to the network of TSPs. However, to make sure that VAS providers do not start monopolising their power, there should be a condition imposed on VAS providers that they should not discriminate between TSPs in the matter of making the content available on a non-discriminatory basis. Such a practice is already prevalent in the broadcasting sector, where each broadcaster is obligated to make channels available to all DTH operators.

Attempts have been made in the past to achieve this objective, but have not met with success because of the reservation and resistance shown by TSPs.

The Telecom Regulatory Authority of India (Trai) sent its recommendations on Growth of Value-Added Services and Regulatory Issues to the government on February 13, 2009. It was suggested that TSPs should provide uniform access to their infrastructure to VAS providers. Further, the authority in its recommendations on Spectrum Management and Licensing Framework issued in May 2010 had indicated to initiate a consultation process separately to identify measures for the proper growth of the VAS industry, including bringing them under the licensing regime.

In January 2011, Assocham released a study paper on Mobile Value-Added Services (MVAS)—A Vehicle to Usher in Inclusive Growth and Bridge the Digital Divide. The study paper identified issues for the growth of MVAS industry, including policy framework, support infrastructure and high equilibrium ecosystem. TRAI uploaded this paper on its website on January 22, 2011, for seeking comments of all stakeholders.

In response to the study paper, some stakeholders, obviously telecom operators, strongly argued against any such move for the obvious reason that they don’t want VAS providers as their direct competition.

The other set of stakeholders—VAS operators—favoured licensing framework for MVAS to provide direct access to networks of TSPs on non-discriminatory terms, which were to be fixed by the regulator. The justification put forward for such an arrangement was that the licensing of MVAS players providing services such as banking, finance, health, news and current affairs will enable the authorities to ensure quality of content and protect consumer interest.

But this effort has not yielded any result and VAS providers still remain at the mercy of TSPs. At the same time, customers are offered differential pricing for content and are further deprived of innovation of the VAS content. Therefore, there is an urgent need to bring out a detailed consultation paper on all the aspects to revolutionise this another important segment in the value chain and, inter alia, to have debate on various aspects:

TSPs should provide open access to subscribers for a VAS provider of their choice;

TSPs should provide uniform access to their infrastructure to VAS providers;

Measures need to be taken to promote open access for VAS providers;

Steps that need to be taken for orderly growth of value-added services;

Steps to be taken to ensure that VAS providers offer content to all TSPs on non-discriminatory basis.

This will kill two birds with one stone—giving the power in the hands of VAS providers to get reasonable commercial terms for their innovative content and, at the same time, avoid any consumer discrimination for the same content, as this can be made available to all customers through their own TSP because of equal access.

The author is CEO of Tathya Consulting

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