India OTT Voice Regulation Will Have Dramatic Potential Ramifications
Mobile operators in the highly-competitive mobile market, no less than operators in other markets, know that Internet access revenues now are the growth driver, not voice.
So it comes as no surprise that, facing pressure on voice revenues, and forced to invest in new spectrum and towers, data tariffs for prepaid customers were hiked 47 percent in June.
Bharti Airtel and Idea Cellular have now also increased charges for postpaid customers by 20 percent in various circles.
At the moment, data contributes perhaps 15 percent of total revenue.
But more price hikes could come, some warn. Mobile operators say they may have to increase data tariffs by up to six times to remain viable if proposed regulations on over the top voice services did not provide a level playing field.
“If you take data rate to five times or six times, a lot of people in India will never be able to access the Internet," said Gopal Vittal, Cellular Operators Association of India vice chairman and Bharti Airtel India managing director.
The assumption being made is that if OTT voice services are not regulated the same way as carrier voice (primarily in terms of fees and taxes), India’s mobile operators, who derive 85 percent of revenue from voice, will lost nearly all their revenue.
Frankly, that already is happening in most other developed country mobile markets, so the concern is not misplaced. On the other hand, mobile service providers in many other markets have essentially shifted to a “connection fee” for mobile service, not directly charging on a per-text message or per-call basis for domestic--and in a growing number of instances--international calls.
On the other hand, many will have a queasy reaction to the notion that services such as Skype or WhatsApp should be regulated in the same way as carrier voice.
In some other markets, services equivalent to carrier voice are regulated in the same way as carrier voice.
But OTT services such as Skype and WhatsApp, when used in an “app user to app user” way, are not so regulated.
It is a difficult issue.