Mobile has become the primary device for India, the fastest growing smartphone market in Asia for Q1 2014. Conversations don’t just take place on social media but they have moved to the world of messaging apps. According to a latest report, Indians spend 3 hours a day on their smartphones and 24% of smartphone users use mobile apps such as Whatsapp and WeChat for business.
Good news for users but bad news for telephone operators. A report from Ovum had predicted that global telecom companies will lose $386 billion between 2012 and 2018 from customers using over-the-top VoIP (Voice over Internet Protocol) solutions such as Skype and Microsoft Lync. These losses will be mostly from international call revenues and roaming services. The companies lost $32.5 billion in texting fees in 2013 and the figure is projected to reach $54 billion by 2016.
The state has been similar in India and Indian operators have been lobbying hard to bring messaging apps under certain regulations; their pleas have been heard by Telecom Regulatory Authority of India (TRAI). The regulatory body has decided to initiate the process of bringing in a regulation for over-the-top (OTT) companies or providers of apps like WhatsApp and Viber to pay connectivity charges to telecom companies and share revenue with the government as well.
The decision was taken at the beginning of this week that a seminar would be organized to access key issues related to OTT such as new developments in OTT, impact of OTT on telecom services providers and their counter measures, legal and regulatory framework for OTT.
Subsequently, TRAI would come up with a discussion paper on OTT players (we are trying to get hold of the paper).
Ongoing push by telecom operators
The move might bring joy for the telecom operators in the country who had been raising their voice for such a guideline. Earlier in the first quarter, Bharti Airtel Joint MD and CEO (India operations), Gopal Vittal had stated that mobile messaging and voice apps that are driving communication globally should be regulated just like telecom firms are regulated.
“I think we need a framework by which these companies are subjected to similar jurisdiction… because that will benefit everybody concerned,” added Vittal.
On another occasion Vittal raised similar concerns and added that the Telecom Regulatory Authority of India (TRAI) should regulate messaging apps like WhatsApp which is all set to evolve into a messaging and voice call app.
However, Vittal’s demand was quashed by TRAI chairman Rahul Khullar who felt that it is the Indian government which can take a call on the regulation part. Adding to it he also stated that the messaging apps are following the rules of the country.
“The architecture is clear; the government will not let these VOIP-based operators enter the market through the licensed route. But as far as voice calls on Skype or Facebook — that is, one Facebook/WhatsApp user to another — are concerned, they are within the rules.”
Asking internet companies to set up servers in India
Apparently, the Indian government and TRAI both are suddenly interested in formulating regulations for messaging and voice apps in the country. The present government is not just interested in setting up guidelines but also indicates that it might ask messaging companies to set up servers.
“We may be asking them to put their servers in India as they get connected to any telecom network in India without getting themselves registered that is something which is also a security concern for us,” added a senior official with the Department of Telecommunications (DoT). He further added that OTT players would anyway have to follow the law of the land.
Persuading Internet companies to set up servers in the country isn’t a new issue. We saw the Congress led UPA government doing it but failing. Instead it deployed the Central Monitoring System that would monitor Internet and mobile activities of Indian citizens.
With the new government in place, it would be interesting to watch it play its cards. Social media monitoring is no more a choice when digital activities of people are at a all-time high. But what is interesting to note here is rather than Telcos joining hands with messaging companies and working together they are trying to bring guidelines and framework.
While the world is becoming more open and connected, telco giants are forcing us to move backwards with time. It would be interesting to watch the guidelines TRAI would be implementing and will the messaging companies be a part of this discussion.
Players like WhatsApp with more than 50M active users from India, consider India to be a big market, just like other players – Viber, WeChat, Line, Hike, etc. While these players have got a sizeable user base in India, revenue generation is still in a nascent stage for them. In such case, what will the messaging companies pay and how would TRAI determine a fees on them?