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VAS Discontentment

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VoicenData Bureau
New Update

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.

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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.

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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

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