Saturday, December 27, 2014

Bhari Airtel Tries Higher Prices for OTT VoIP Bandwidth

Bharti Airtel prepaid customers, under a new pricing regime, will not be be able to use discounted mobile Internet access rates when using an over-the-top voice over Internet protocol app such as Skype, Viber and similar services.

The move is reminiscent of pricing policies some mobile service providers adopted when VoIP services first emerged as a threat to voice revenues.

To be sure, there is a nuance. The new policies mean usage of mobile Internet access for VoIP apps does not qualify for prepaid data discounted rates, effectively raising the cost of using an OTT VoIP app.

Bharti Airtel can continue to claim that formal prices for use of VoIP bandwidth have not been raised; VoIP usage simply uses a “standard” rate, not a discounted rate that applies to other Internet apps and usage.

Effectively, it is a price increase. Starting in January 2015, Airtel customers using a prepaid data pack will be charged a higher rate for VoIP calls.

Bharti Airtel says use of VoIP apps will be charged at “standard” data rates of 4 paise per 10 KB on 3G networks and 10 paise per 10 KB on 2G networks.

The discounted rate is 0.25 paise per 10KB of usage.

Based on standard rates, usage of one gigabyte of data for VoIP on 3G network will cost about Rs 4,000 and while the same on 2G network will cost about Rs 10,000.

Such practices have been controversial in the past, and Indian regulators already are looking into the practice. TeliaSonera, for example, planned something similar in 2012, but eventually raised mobile data rates across the board, instead.

TeliaSonera, like Bharti Airtel, primarily was concerned about lost voice revenues when it considered the differential pricing plans.

Taking a slightly-different tack, Bharti Airtel says the move is necessary so Bharti Airtel can continue to make investment in expanded data services. In a broad sense, that is correct.

OTT voice shrinks the carrier voice business that represent the bulk of Bharti Airtel revenues, making that larger investment task harder.

Some argue the pricing moves violate network neutrality principles that allow people use of any lawful app, without blocking. That isn’t directly the issue here.

Nor does Bharti Airtel seem to be engaging in any effort to “speed up” or “slow down” VoIP packets or otherwise favor any class of apps. So the issue is less any potential violations of network neutrality principles and more an instance of supplier retail policies.

Whether the new move is the wisest course is the issue. In the past, similar practices have generated ill will. Still, in 2013 perhaps a quarter of all mobile service providers levied some sort of additional charge for use of mobile VoIP services.

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