TRAI seeks views to regulate net-based calling, messaging apps

Telecom regulator TRAI today started the process to prepare regulatory framework for Internet-based calling and messaging applications like Skype, Viber, WhatsApp and Google Talk, known as over-the-top (OTT) players.

"Worldwide, there is an ongoing debate among governments, industry and consumers regarding regulations of OTT services and Net-neutrality. In this background, TRAI today released a consultation paper on regulatory framework for OTT services," TRAI Secretary Sudhir Gupta said in a statement.

At present, consumers get to make phone calls and send messages using Internet connection through mobile applications and their computers. They are required to pay only Internet bandwidth consumed but nothing on per call or message basis.
Telecom operators and VoIP service providers or OTT players have been at loggerheads over this issue.

Telecom operators have said that OTT players like Skype, WhatsApp, Viber etc are eating up their main revenue without investing in networks.

On the other hand, OTT players defend themselves by demanding access to Internet or web-based services without hurdle for growth of communities and nations.

TRAI Chairman Rahul Khullar had earlier indicated about starting the process to frame regulation on OTT services after Airtel earned huge criticism from public for its plan to charge separately for VoIP calls, against principles of Net-neutrality.

Under the Net-neutrality principle, telecom and Internet companies should treat all web-based services equally and there should be no differential pricing or any kind of barrier that discourages people from accessing services.

However, there is no legislation in India at present on Net-neutrality.
TRAI said that telecom service providers (TSPs) offering fixed and mobile telephony are currently being overwhelmed by online content, known as over-the-top (OTT) applications, and 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.

The regulator said that characteristics of OTT services are such that TSPs realise revenues solely from the increased data usage of the Internet-connected customers and do not realise any other revenues.

"On the other hand, OTT providers make use of the TSPs' infrastructure to reach their customers... that not only makes money for them but also compete with the traditional services offered by TSPs," TRAI said.

The regulator has sought views of people interested in the matter by April 24 and counter comments by May 8.


Citing industry reports, TRAI said that in 2013, Skype carried an estimated 214 billion minutes of international calls within its app network.

Skype's traffic was almost 40 per cent of the size of the entire conventional international telecom market and in growth terms, it now far out-paces the combined growth in the voice minutes of the global telecom industry, TRAI said.

"With innovations in OTT services, Full-HD voice is slowly becoming a reality for customers all over the world. The call quality of Skype and Google Voice is improving rapidly and, in some markets, nearly matches that of a circuit switched call," the regulator said.

However, it said that impact of VoIP calls is not much in Indian market because of low call rates provided by telecom operators which is in the range of 40-60 paise a minute, low Internet penetration and quality of service provided by OTT players not being up to the mark.

The regulator said impact of OTT messaging applications on SMS in India has been in line with international trends.

As on January 2015, WhatsApp had 700 million monthly active users across the globe and is delivering about 30 billion messages on an average each day. While, BlackBerry had over 50 million users of Messenger service in May 2011, who sent 100 billion messages each month.

"The user base of OTT messaging services has grown to more than one billion in less than five years, impacting TSPs and other service providers all over the world. This impact has also been felt in India," TRAI said.

"The (SMS) messaging traffic fell (in India) from 5,346 million in June 2013 to 4,367 million in June 2014, a decline of 18.3 per cent. This decrease can be attributed almost entirely to an increase in traffic of OTT messaging apps," TRAI said.

In the fourth quarter of 2014, Bharti Airtel and Idea Cellular, both Indian TSPs, have shown a significant drop in their messaging and Value Added Service (VAS) revenues as a percentage of total revenues, it added.

Quoting industry reports, TRAI said that as on December 2014, WhatsApp topped the messaging application market with 52 per cent of all users using OTT messaging services in India, followed by Facebook Messenger with 42 per cent, Skype with 37 per cent and WeChat with 26 per cent share.

Viber stood at fifth spot with 18 per cent share and Line stood at sixth position with 12 per cent share.

WhatsApp's subscriber base in India has risen to 70 million and it has a free subscription model unlike in developed markets where the annual fee is USD 1, the regulator said.