India’s telecom regulator TRAI, flooded with demands from the service providers to halt the IM and VOIP apps by WhatsApp, Skype among others, has released a consultation paper on Friday, March 27, 2015 providing a quick look at the impending regulatory framework in preparation for Over the Top (OTT) services to be charged extra soon.
The move, if allowed, may benefit telecom service provider (TSPs) to charge separately for the use of app-based instant messaging (IM) services like WhatsApp and Viber and Voice over Internet Protocol (VOIP), which is pending since August 2014 and Airtel’s misadventure in November to collect extra charges for these services met with harsh reluctance from the users and TRAI alike.
With WhatsApp multiplying its user base to 70 million in just three years and Skype going on top as a free phone-call service on Internet, the revenue stream is fast shrinking for these service providers not only in India but elsewhere in the world.
The best known examples of OTT in India are Skype, Viber, WhatsApp, Chat On, Snapchat, Instagram, Kik, Google Talk, Hike, Line, WeChat, Tango, ecommerce sites (Amazon, Flipkart etc.), Ola, Facebook messenger, Black Berry Messenger, iMessage, online video games and movies (Netflix, Pandora). Today, users can directly access these applications online from any place, at any time, using the Internet.
Giving an example of Skype usage of network in 2013, the consultation paper pointed out that Skype carried an estimated 214 billion7 minutes of international “on-net” calls (i.e. from one Skype app to another, rather than calls made from Skype to a regular phone). Skype’s traffic was about 40% the conventional international telecom market, it said.
“The growth of traffic apart, the OTT applications have created an increasing demand for faster broadband speed, which translates into a need for huge investments in network up-gradation by the TSPs,” said the consultation paper uploaded on TRAI website.
The SMS messaging traffic for TSPs fell from 5346 million in June 2013 to 4367 million in June 2014, a decline of 18.3%, pointed out the consultation paper. While the TSPs earned 50 paise for each phone call on their smartphones, they earned merely 4 paise per such call on VOIP, noted the paper. Similarly, they earned 16 paise per SMS but only 1 paise per WhatsApp message.
Essentially, it has zeroed in on three types of web content under OTT apps, Messaging and voice services, application eco-systems linked to social networks like FaceBook and WhatsApp or e-commerce like Flipkart. Finally, the free video and audio content came under the purview of the consultation paper.
It has asked for inputs and opinion on “what should be the framework to address these issues? How can the prevailing laws and regulations be applied to OTT players (who operate in the virtual world) and compliance enforced? What could be the impact on the economy.”
TRAI is also contemplating regulatory framework on net neutrality, which stipulates that all telecom and Internet companies should treat web-based services equally without any differentiation in pricing or any other barrier. Similar move by American companies met the Presidential veto recently by President Barack Obama.
However, in the absence of any legislation on net-neutrality in India, TRAI Chairman Rahul Khullar had recently hinted at bringing some legislation but before that the OTT issue took precedence with the telecom lobby pushing for a government intervention on rivals like Skype, Viber and now WhatsApp VOIP or phone calling feature.