Indian telecom companies have always been quite vocal about their dislike for over-the-top (OTT) services such as messaging and calling apps as it provides similar services and penetrates into their market, eating into their biggest revenue streams. Telecom companies have made a strong case to TRAI about OTT services hampering revenue and seeking recommendation on regulation of OTT service. It is an undisputed fact that VoIP (voice over internet protocol) service offered by OCSPs (OTT Communication Service Providers) is a substitute for services offered by telecom service providers (TSPs). Telecom companies have been having a hard time trying to increase revenues, especially as SMS usage drops and messaging apps become the norm. Most users do not have to incur extra costs of SMS because of free calling apps, phone calls. This meant that telecom companies started promoting data plans instead of talk time or SMS plans and as a result data adoption and usage has increased. But telecom companies are realising that this change comes at a high cost.

OCSPs offer these services without holding any license in India, which violates the Indian Telegraph Act. The Licensing and Regulatory Regime cannot allow a situation where in the licensed entity is treated at a lower footing than an unlicensed entity. As a matter of fact communication apps offer calling services at far lower rates than carriers – mostly a consumer just pays for the data consumed – thus eating into the telcos’ revenue pie. Voice still accounts for around 80% of a telco’s revenue. Telcos want these apps to pay the same levies such as license fee, spectrum charges etc besides follow rules around security, lawful interception, quality of service. This could mean the apps wouldn’t be able to offer calling and messaging services virtually for free because of the increased costs.

It noted that mobile phone operators realize only around a sixth from a data call made over the communications apps compared to what they realize from a normal voice call. The low data price is furthering the growth of VoIP/Internet Telephony by unlicensed OCSPs at the cost of PSTN voice telephony, thereby reducing TSPs ability to continue with the lower price of data for accessing content over the Internet. Thus OCSPs should be brought within the ambit of Indian regulatory landscape. It is important that TRAIL addresses the issues surrounding termination charges from calls from a communication app to a regular cellular network, but keep in mind the ongoing court cases around the issue of termination charges. Issues such as allocation of a separate number series for internet traffic, security, lawful interception, quality of service needs to be sorted out before termination of internet telephony calls is facilitated in PSTN/PLMN network.