Airtel takes on OTT with higher VoIP call charges

Indian telecom service provider Bharti Airtel has increased VoIP call charges to 4 paise / 10 KB for 3G service to take on OTT players.

For comparison, Bharti Airtel charges 0.25 paise per 10 KB for traditional 3G data.

The development will impact the thriving business of over-the-top (OTT) players such as Whatsapp, Skype and Viber, which offer free voice calls over the internet.

TRAI, in its June 2014 report said total outgoing minutes of usage for Internet telephony was 284 million during the second quarter of 2014.

According to media reports, the company said the new differential rates between voice calls made on the internet (VoIP) and browsing will be unveiled next month. Its rivals such as Idea Cellular and Vodafone India are expected to follow suit, leading to a debate over net neutrality.

Bharti-Airtel

Last month, American President Barack Obama has called for net neutrality suggesting that the U.S. telecom operators such as AT&T, Verizon Wireless, Sprint, T-Mobile, etc. should not discriminate its customers by offering different data packages for same services.

Voice usage dips

Infonetics, now part of IHS, said voice usage from telecoms slightly slowed, dragged by China where over-the-top (OTT) alternatives took their share, and mobile broadband overtook SMS as the largest revenue generator of mobile data in the first half of 2014.

Windsor Holden of Juniper Research said: “Given the threat from OTT VoIP and messaging services to core service revenue, the US emphasis on focusing the value on the data element is absolutely the right way to go. This is particularly true within an increasingly 4G environment.”

Airtel has reasons to worry

Airtel has reasons to worry. Worldwide mobile service revenue marginally increased 0.5 percent in the first half of 2014 to $385.5 billion from the same period a year ago.

Despite 26 percent increase in mobile data revenue, blended ARPU fell in every region, including developing Asia Pacific.

“We have made some revisions in the composition of our data packs and will offer VoIP connectivity through an independent pack that will be launched shortly. Our customers can continue enjoying voice calls over data connectivity by opting for this VoIP pack, or simply use VoIP services on pay-as-you-go basis,” a Bharti Airtel statement said.

Earlier, telecom industry body Cellular Operators Association of India (COAI) wrote to TRAI that OTT players are eating into their revenues by offering free voice calls using their network and, unlike the telecoms, they did not have to pay any regulatory charges to the government.

OTT threatens telecoms

Arpita Pal Agrawal, Leader – Telecom, PwC India, last week, predicted that Indian mobile operators will resort to unconventional monetization options.

“Given the steadily increasing divergence between data revenues and cost, a trend that will likely sharpen in 2015, mobile companies will start looking at unconventional monetization options. These would span strengthening of internal capabilities to offer differentiated network experience (Smart Pipes), as well as harnessing the extended ecosystem including OTT plays,” said Arpita Pal Agrawal, Leader – Telecom, PwC.

Current Analysis in its report said the impact of OTT services grew in 2014, and carriers are finding it increasingly difficult to compete against OTT messaging apps. WhatsApp and Facebook Messenger are garnering significant scale and threaten carrier relationships with their own customers.

Juniper Research said voice and messaging traffic lost to OTT players such as WhatsApp, Facebook and Skype will cost network operators $14 billion in revenues globally this year, up by 26 percent on 2013.

Baburajan K
editor@telecomlead.com