TRAI issues consultation paper on free data

NEW DELHI: The Indian telecom watchdog Telecom Regulatory Authority of India (TRAI) has issued consultation papers on “free data”.

Accordingly, this Consultation Paper is being issued to explore model(s) that could achieve the benefits of offering free data while avoiding the ingenuity that the Differential Tariff Regulation is meant to prevent. The model should facilitate the un-connected and under-connected consumer to become better connected and should not allow any TSP or large company playing a gatekeeper or biased role.

The model should use the principles of open, transparent and equal access to consumer services by all consumers and all businesses. TRAI believes that the proposed model should not hold back innovation and the opportunity to increase Internet penetration and usage. Following figure provides a macro view of the concept.

"One model could be to provide Reward-to consumers through a TSP agnostic platform when they download certain application or have some activity on a particular website. In this reward based model apps may provide rewards in the form of a recharge for data usage or for voice usage to the users," TRAI said in statement.

There are some examples of reward based models in India, most notably: (1) Discovery Apps dedicated to providing rewards in return for engagement; such as mCent, Gigato, Taskbucks, Ladoo, EarnTalktime, Pokkt and many more and (2) Rewards platforms that can enable any app/site to offer rewards for desired action or even mobile data rewards for everyday activities like paying electricity bill on time or checking out of the hotel on time etc.

"The other model, very similar to rewards based model, where instead of a recharge API there could be an equivalent “don’t charge” or toll free API," it said.

This model is also prevalent in many developed markets, allowing free access to certain websites and applications. This helps the businesses make their service easily accessible without impacting the mobile bill of the consumers.

"In this model, the TSP does not act as a gatekeeper and plays a passive role. The platform owner has a business interest to allow any and every content provider making the model neutral. This model will work for mobile subscribers who have zero-balance as the subscribers are not being charged so they don’t need balance vs. a reward model that requires an action before the reward thereby excluding the mobile users who have low or zero balance. In the model, where recharge is happening based on action, it’s hard to know the cost of data for a given user. For example, suppose Person A is on 1GB data pack costing Rs. 250, and Person B is on the tariff of 10 paise per 10 Kb," it added.

"If the data consumed in one session of Internet surfing is 50 MB, Person A incurs Rs. 12.20 whereas Person B incurs Rs. 512. This is nearly 42 times the cost incurred by Person A. In the toll-free model, given the data used is not getting billed to the mobile subscriber, true cost of data is covered without any confusion," said TRAI's  free data consultation paper.

The direct money transfer approach could be similar to the subsidy payment, for the domestic LPG connections, wherein the user pays for the connection like any other normal connection, and then the Oil Company/Government pays the subsidy directly into his/her bank account.

"This model, deployed through a TSP agnostic platform, offers similar benefits as the first two models. However, just like in Toll Free Model, the Platform owner not only measure the real time data consumption but also the tariff that is being applied to each individual user and reimburse/recharge actual amount incurred by the user in the form of a recharge for data usage or for voice usage to the user," it further added.

There may be a number of other possible solutions to provide free data or suitable reimbursement to users, without violating the principles of Differential Pricing for Data laid down in TRAI Regulation. The objective of this consultation is to explore such models and frame regulations to facilitate them.

In this context, The main issues are:

- Is there a need to have a TSP agnostic platform to provide free data or suitable reimbursement to users, without violating the principles laid out in February?

- Whether such platforms need to be regulated by the TRAI or market be allowed to develop these platforms?

- Whether free data or suitable reimbursement to users should be limited to mobile data users only or could it be extended through technical means to subscribers of fixed line broadband or leased line?