Indian
telecom companies have been quite vocal about their dislike for
over-the-top (OTT) services such as messaging and calling apps eating
into one of their biggest revenue streams – voice calling and SMSes.
In
the past there were murmurs about telcos seeking TRAI recommendation on
regulation of OTT services, and reports today add more fuel to the
story. If telcos manage to make a strong case to TRAI about OTT services
hampering revenue, then users would most likely have to bear the cost.
Let’s take a step back and understand what the whole brouhaha is about.
Telecom
companies have been having a hard time trying to increase revenues,
especially as SMS usage drops and messaging apps become the norm.
With
data plans galore, most users do not have to incur extra costs of SMS
and, thanks to free calling apps, phone calls. This meant that telecom
companies started promoting data plans instead of talk time or SMS plans
and as a result data adoption and usage has increased. But telecom
companies are realising that this change comes at a high cost.
The
Association of Unified Telecom Service Providers of India (AUSPI)
president CS Rao said that though OTT players provide the same services
that mobile service providers offer, there’s no regulation. “Major
regulatory realignment is needed when consumers are moving from minutes
usage to megabyte usage era. I want TRAI to note issue of stressed
capacity of network. If 20 per cent of our customers start using OTT
service, then burden on network will increase $ 55 per subscriber,” Rao
told PTI.
The
fallacy here is that mobile service providers do not offer the same
services as the likes of WhatsApp. SMS costs are for each message sent,
while messaging apps do not have any such per-message fee.
OTT
players have alleged that telecom companies want regulation when it
suits them and previously when VAS was booming, these same telcos urged
OTT players to not go to TRAI over regulation in this field. So in a
way, the tables have now turned. Internet & Mobile Association of
India (IAMAI) president Subho Ray told PTI, “It is the reverse of what
we used to say about VAS to regulator that we are not getting revenue
share. The same operators used to ask us don’t go to telecom regulator.”
One
could say that telecom companies have been slow to react to a massive
sea change in mobile usage, not being wise enough to see where the
market was trending towards. It could be called vision paralysis, but
that’s not a consideration for the average user. For users, the big
question is will I have to pay to use WhatsApp. And what if I have
already paid? This is where things get tricky. While telcos want
regulation, it’s not yet clear who will incur the costs, or whether
costs will be for all OTT services or only the ones being used most.
What counts as a OTT service? There’s really no clarity.
One
scenario is that besides data plans, users will have to pay
app-specific charges, akin to fast lanes that US telecom companies have
long been fighting for. While the net neutrality debate in the US spans a
whole range of Internet-enabled services and not just OTT services, one
can draw a parallel to the India situation, in that users may have to
pay extra to access these services.
In
India, telecom companies are urging for regulation, which is a highly
dodgy path to take and is not the best precedent. Mobile technology
moves much faster than regulation and if messaging and calling apps are
the norm today, there will be replacements and alternatives in a few
months, if not sooner.
Secondly,
how do telecom companies plan to deal with the flood of messaging apps?
Sure, WhatsApp is popular, but it has been popular for a long time.
These days apps such as Hike, Line, WeChat, Telegram, Viber make
WhatsApp just an alternative. Secondly, even calling apps are
dime-a-dozen. And what about Apple’s iMessage or Google Hangouts? There
are simply too many options to cover and users will always find one that
does not have prohibitive fees, if that’s the route adopted.
Telecom
companies may cry about lost revenues, but there are plenty of
opportunities for growth even in an OTT-first world. Ecosystem tie-ups
such as the one Facebook signed with Airtel in Zambia for free Internet
access are an option. The advent of 4G services will bring more
opportunities, especially in video streaming, live events and other
aspects which require data-heavy usage. In fact, as more mobile devices
replace PCs, the revenue growth potential even within cellular data is
quite high.
At
the moment, telcos are coming off as cry-babies lamenting the death of
phone calls and SMSes. Those died a while ago. It’s a different world
now and regulation will hamper connections more than anything else.
Posted by : Gizmeon
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