Social network sites and instant messaging services are robbing telecom companies of revenue
GN Bureau | March 30, 2015
There is disconnect in the industry and the regulator seems to have realized it. With users bypassing regular revenue earning services like voice call and SMS, the telecom companies have reason to be disconnected with their subscribers who are increasingly using WhatsApp, Skype, Viber and many other services to connect.
Now, the Telecom Regulatory Authority of India (Trai) has initiated the process to prepare framework for over-the-top (OTT) services like WhatsApp, Skype and other similar services.
OTT refers to applications and services such as social networks, search engines and amateur video aggregation sites. Some such OTT sites apart from WhatsApp, Skype, Viber are: Chat On, Snapchat, Instagram, Kik, Google Talk, Hike, Line, WeChat, Tango, Facebook Messenger and eCommerce sites.
Mobile subscribers can directly access these applications, using a variety of Internet-connected devices at no cost, resulting in telecom service providers losing out on SMS usage.
The OTT providers make use of the service providers’ infrastructure to reach customers, which not only helps them make money but also allows them to compete with traditional services offered by telecom service providers, the Trai consultation paper released last week said. The regulator has invited comments from the stakeholders by April 24 and counter comments by May 8.
Telecom operators have said that OTT players are eating up their main revenue without investing in networks.
"Worldwide, there is an ongoing debate among governments, industry and consumers regarding regulations of OTT services and net-neutrality,” the regulator said. In this background, Trai has released the consultation paper on regulatory framework for OTT services.
"It is becoming increasingly difficult for consumers to know if there is an economic difference in connecting various networks via a landline phone, cell phone, or a computer."
"In fact, young users find it difficult to distinguish among these three networks; from their perspective, all that matters is connectivity," Trai said.
"They are also not involved in planning, selling, or enabling OTT apps. On the other hand, OTT providers make use of the TSPs' infrastructure to reach their customers and offer products/services that not only make money for them but also compete with the traditional services offered by TSPs," it added.
TRAI said telecom service providers offering fixed and mobile telephony are currently being overwhelmed by online content or OTT applications and services.