Initiatives by the Telecom Regulatory Authority of India to bring VAS
companies under the gambit of the regulation is worth appreciating. Views
expressed by different stakeholders comprising associations of VAS companies and
service providers to the recent Trai consultation paper, lack commitment to the
growth of the industry. Since voice revenue is continuing to come under severe
pressure, VAS is one of the options to stay afloat in the long term for service
providers. Should it come under a regime? Yes, it should be part of the
authorized industry. This will ensure further growth, and small players will get
enough opportunities to become a part of the organized segment.
However, mobile VAS companies should not be brought under the
telecom-licensing regime under the India Telegraph Act, 1885, as they do not own
any telecom infrastructure. This apart, since the revenue of VAS players is
dependent on the revenue sharing formula, which is undergoing debates with
service providers, there is no need to impose license fee on VAS companies.
Still, the proposed regulation should prompt content companies to be more
responsible for quality of service to end-consumers. For this, Trai should make
special provisions whereby content aggregators and content providers can be
registered under a government body. This will also ensure the entry of serious
players and protect the interests of end-consumers, besides compliance on
security.
There are also some indications about lack of cooperation and diminishing
enthusiasm among service providers to innovate value added services. Telecom
operators are ready to suppress the entry of VAS companies to avoid competition.
While protecting the interest of service providers and consumers, Trai should
also look at the difficulties faced by VAS companies in the market place. There
should be incentives for VAS companies to help innovate and introduce newer
products and services for the benefit of consumers.
Should the government regulate the revenue sharing between VAS companies and
SPs? In some applications, the revenue share to VAS players is as little as
8-10%. I feel that all stakeholders contributed to the success of the VAS
segment in the country. Service providers should be open to accept innovation
and encourage more VAS players to come into the segment. Like any other
business, economies of scale will change the nature of the game including the
revenue share. Let the market forces determine the prices and not the regulator.
Finally, under the current regime, the service provider determines the price
for the end-consumer. Let them continue with their innovative pricing
strategies, as they are closer to consumers. And Trai should look at adding the
emerging content services such as 3G, social networking, user generated content,
etc, to the definition of VAS.
Baburajan K
baburajank@cybermedia.co.in