TRAI consultation paper on OTT services: Highlights

OTT (Source: Prime Focus Technologies)Telecom Regulatory Authority of India (TRAI) today issued Consultation Paper on Regulatory Framework for Over-The-Top (OTT) communication Services.

The consultation paper will focus on the regulatory issues and economic concerns pertaining to OTT services.

Through this paper, the regulatory body seeks to address the long-standing demand from the operator community on creating a strict regulatory framework for OTT players, who are not bound by licensing obligations and other stringent service quality benchmarks as applicable to traditional operators.

Accordingly, TRAI seeks to analyze and discuss the implications of the growth of OTT services, the relationship between TSPs and OTT players, whether any change is required in the current regulatory framework and the manner in which such changes should be effected.

Since different governing bodies have assigned different definitions for OTT, and the services categorized under this umbrella also vary accordingly, there is ambiguity over the regulatory measures to be adopted across these services.

Many OTT applications provide multiple services within or using the same platform. This may lead to problem of disaggregating relevant services that need to be regulated.

Through this consultation, TRAI seeks to address which service when provided by the OTT service provider should be regarded as the same or similar to service being provided by the TSPs. It also focuses on whether substitutability be treated as the primary criterion for comparison of regulatory or licensing norms applicable to TSPs and OTT service providers.

In the wake of the new developments around 4G and increasing data consumption, TRAI also seeks to explore the relevant issues from the economic perspective.

The growth in OTT services and the consequent increase in data traffic is also growth for TSP’s business. However, average price per GB has sharply declined from the average of Rs 75.57 per GB in the year 2016 to Rs 12.06 per GB in the year 2018. In this context, TSPs may be required to invest in telecom infrastructure to enhance traffic handling capabilities and to cater to growing demand of data traffic.

Shift of voice calls from circuit switched network to IP based networks has resulted in TSPs charging consumers for data services only, while unlimited voice calls are offered as part of bundled tariff packages in a trend that is also likely to continue. In such a scenario, voice calls provided by TSPs using IP networks and voice calls provided by OTT players using Internet might be comparable from charging perspective as both charged on basis of data consumed. In this context, it is unclear whether there is a price arbitrage between OTT and traditional services.

Video traffic is another major component of current revenue stream for the TSPs. Between 2016 and 2021, mobile video traffic in India is expected to grow at a compound annual growth rate of 68 percent and the number of video capable devices and connections is expected to grow 2.2 times, crossing 800 million in number. Video is expected to grow to 78 percent of the overall mobile data traffic by 20217 (Source: KPMG).

TRAI also dwells on the pricing strategy adopted by OTT providers. The OTT provider is required to deliver an acceptable QoS to all its customers and equal treatment to all services that depend upon it. Similarly the mix of services consumed by different customers is different, so the “one price for all data” approach will have several implications that need to be analyzed.

The paper also analyzes whether the regulatory or licensing imbalance is impacting telecom network investments and whether interoperability among OTT services themselves and with TSPs are expected to promote competition, eventually benefitting end users.

Further, TRAI seeks to resolve the issue of lawful interception in the context of national security and wants to gather opinion on whether the responsibilities of OTT service providers and TSPs be separated. The paper also draws the attention to whether the provisions for emergency services to be made accessible via OTT platforms.

Deadline to submit views on the consultation paper is December 10, 2018, and that for submitting counter comments is December 24, 2018.

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