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EVENT UPDATE: Mobile Monday, Mumbai - VAS Players Unhappy on Consultation Paper Released by TRAI - Ask for ‘Level Playing Field’!
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The August event of Mobile Monday Mumbai was held yesterday to discuss the consultation paper released by The Telecom Regulatory Authority of India (TRAI) on mobile value added services (VAS) recently. WATBlog was at the event to see what the esteemed panelists had to say about TRAI’s recommendation on regulating and licensing mobile value added services and other services to be provided via 3G and Next Generation Network (NGN). The panelists were -
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Arvind Rao, CEO, OnMobile
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Beerud Sheth, Co-founder, SMSGupShup.com
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Viren Popli, SVP & Head - Mobile Entertainment, Star India
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Raj Singh, MD, Active Media
IAMAI, i.e. the Internet and Mobile Association of India, has already submitted a response to the consultation paper. The response asks for a ‘Level Playing Field’.
Interestingly, TRAI has released one more recommendation yesterday, suggesting unrestricted VOIP. TRAI seems to have finally woken up and will hopefully dole out policies which will have good benefits for the end consumers.
On the mobile VAS front, TRAI has asked a number of questions to VAS players in India. However, the most discussed question in yesterday’s event was:
Should companies that provide Value Added Services for mobile and who mainly act as content providers or content aggregators while operating value added services technology platform called Value Added Service Providers (VASPs) need to be brought under the licensing regime or not?
The discussion started off with Arvind Rao, CEO, OnMobile (OnMobile is a leading VAS player in India and has recently gone on an acquiring spree). He mentioned that regulation is required to provide better quality services but licensing is a severe problem. All the panelists were completely against the idea of licensing. However, they do not mind registering with TRAI, the services they offer to Mobile Operators. Viren Popli, SVP & Head - Mobile Entertainment, Star India rightly said, “Registration is okay but licensing is a problem. It’s like opening of the Pandora’s box, where will we draw the Lakshman Rekha?”
The panelists were keen on asking TRAI to give them easier and better access to the mobile operators. Beerud Sheth, Co-founder, SMSGupShup.com (SMS Gupshup is a premium group sms service provider in the VAS industry and its rumored that they have been funded by Helion Venture Capital) pointed out that “Open access fosters innovation.” Raj Singh, MD ActiveMedia, seconded Beerud’s thought and mentioned that “…there is a requirement of some guidelines which will help the Mobiles VAS players in India to better deal with the mobile operators.” Currently, mobile operators enjoy a dominant revenue share of the VAS pie.
The discussion rounded off with the note that TRAI has made an effort to bring some kind of sense in the chaotic world of VAS in India. The current VAS industry in India is estimated to be $1.5 billion according to Arvind. The question to be asked is how will the end consumer be affected if and when the policy is passed by TRAI?
WATBlog’s Take
One of the points also discussed in the event was on laws and regulations required for content providers. Already, there are laws which protect content providers (Copyright Law) in India but what lacks is the proper enforcement. As the end consumer, we question our operators when a problem occurs or the content provided is offending in nature. However, the operator cannot be held responsible as he is just providing delivery network and collection point to the content provider / VAS player. Therefore, the question arises, whom does the end consumer go to voice his grievance? Here come the benefits of having some kind of regulation in the VAS industry. If and when a policy is passed by the TRAI keeping into consideration the above facts pointed out by leading VAS players in India, there will not only be growth in the VAS industry with more players entering and giving consumer more choice to opt from but we will also see a drop in the prices we are charged to obtain these services. We can arrive at a win - win scenario for all where the VAS players get a proper revenue share and visibility, the operators don’t have to face the back lash from their customers and the end consumers get to enjoy more and better quality services.
Shāyon Adds : It’s a shame that such a discussion didn’t include any representative from the mobile service providers nor from the regulatory body. In a discussion that involves the service providers so closely, I am rather surprised at their lack of representation.
Anyway, it’s not surprising that the VAS players are keen to get their services registered with TRAI since it gives them legitimacy as content providers. What makes them sore is the idea of licensing. They know it all too well that once the process falls within the arms of the regulatory system, they are going to have a much tougher life ahead. While the fact that the mobile operators currently eat away the lian’s share of revenue, they are also reluctant to get a governing body hovering over their heads all the time.
Yes, it’s true that “Open access fosters innovation”. But, even a presence of a process and a few regulations are also required to be able to tame the market and provide it with a structure.
The very reason why TRAI is interested to get VAS providers under the licensing regime stems from security concerns that have been spurred by the issues concerning Blackberry services in India. The regulatory body has also raised concerns regarding licensing obligations for protecting copyrights like distribution rights management and other laws.
TRAI feels,
“In such cases (the Blackberry case), a licensing and appropriate regulatory regime will provide clarity and the telecom operators need to source the content for value-added services from authorised, licensed or registered content aggregators in India.”
Licensing should actually standardize the industry and resolve issues like revenue sharing and opening up of access pipes with the operators. With the upcoming 3G networks in the country, licensing is very essential in cases of foreign investors and technologies sweeping the market. Such debates have actually created a rift among the Rs 4,500 crore Indian VAS industry players.
With the advent of Mobile Virtual Network Operators, the telecom operators and VASPs need to look into their practices and redesign the revenue sharing model.
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