Trai to decide if regulatory imbalance exists between telcos and OTT players

Telecom regulator Trai will soon decide whether any regulatory imbalance exists between telecom players and over-the-top (OTT) players such as Skype and WhatsApp.

On Monday, Telecom Regulatory Authority of India (Trai) issued a consultation paper, 'Regulatory Framework for Over The Top Communications Services' to analyse and discuss changes that may be required in the current regulatory framework to govern these entities and the manner in which such changes should be effected.

It has been a long-standing demand of incumbent telecom services providers (TSPs) to bring OTT players under the ambit of regulation.

DNA Money had reported on November 6 about Trai's plans to come out with a consultation paper on OTT players this month.

The scope of the current consultation would revolve around regulatory issues and economic concerns pertaining to those OTT services that are same or similar to the services provided by telecom companies.

In the consultation paper, Trai has sought comments from stakeholders on various issues. One of the points where the regulator has asked for comments is which OTT services should be regarded as the same or similar to those offered by telecom operators and if "substitutability" should be the main criteria for comparison of regulatory or licensing rules applicable to TSPs and OTT service providers.

"The objective of this consultation paper is to analyse and discuss the implications of the growth of OTTs, the relationship between OTT players and TSPs, the similarity, if any, between services provided by the TSPs and OTT players," Trai said in a statement.

It also asked whether regulatory or licensing imbalance is impacting telecom network investments especially required for capacity expansions and technology upgradations, and how OTT service providers can participate in infusing investment in the telecom networks.

"Would inter-operability among OTT services and also inter-operability of their services with TSPs' services promote competition and benefit the users," Trai has asked.

OTT are applications riding on internet network.

The paper will also look into issues surrounding lawful interception of OTT communication that needs to be resolved in the interest of national security and whether responsibilities of OTT service providers and TSPs should be distinct. It will also see if there is any non-level playing field between OTT providers and TSPs giving same or similar services and sought suggestions on whether regulatory or licensing norms should be imposed on OTT service providers to fix such regulatory imbalance.

Cellular Operators' Association of India (COAI) director general Rajan Mathews said a detailed response will come in a few days after reading the nuances of the paper.

Trai has asked the industry to give its views by December 10 this year and counter comments by December 24 this year.

Telecom players' main concern lies in the fact they are subject to licence fee, a number of levies and spectrum charges while OTT players ride on their network without any costs.

At one point of time, voice and SMS revenues contributed to about 60-70% of revenues of telecom players. But after the entry of OTT players like WhatsApp and Skype and entry of new telecom firm Reliance Jio, voice calls have become virtually free and telecom sector's revenues have taken a substantial hit. Also, with the uptake of 4G services, more and more consumers are shifting towards data services.

Earlier, a consultation paper was issued in 2015 and the comments received at then have been considered in the current paper. At that time, Trai only addressed the issue of Net Neutrality and differential pricing access of data, leaving out OTT aspect.

However, there are two camps on this issue. Some say OTT players should be regulated while some say this will stifle innovation in the industry. The OTT industry in a way contributes to an increase in data consumption for telecom players, experts say.

...& ANALYSIS

• The regulator has asked the industry to give its views by December 10, this year and counter comments by December 24 this year
   
• It has asked whether regulatory or licensing imbalance is impacting telecom network investments and how OTT service providers can participate in infusing investment
   
• The paper will also look into issues surrounding lawful interception of OTT communication that needs to be resolved in the interest of national security