Indian Telecom Authority Scraps Telecom Players Plea to Charge Messaging Apps

Published Date : Aug 21, 2014

Earlier in August 2014, leading Indian telecom market participants had united to lodge an appeal with the Telecom Regulatory Authority of India (TRAI) to levy a connectivity fee on customers that were using messaging and VOIP apps such as Viber, WeChat, and WhatsApp. A string of meetings ensued between the government agency and private players, as the latter claimed they were losing about INR 5000 crore per year to consumers installing apps from Over The Top Players and bypassing core services (except data services) offered by the telecom companies.

This caused much speculation in the market as the flurry of meetings led some analysts to infer that Indian consumers could well have to shell out an extra sum for using Messaging and VOIP apps. These apps are offered free in other countries worldwide. 

But much to the relief of consumers, the TRAI has rejected this proposal and has barred telecom operators to charge customers with any additional fees for using these OTTP apps. 

The TRAI, in its reasons for scrapping the request said that telecom companies in the Indian market were making enough revenues to offset any shortfall from traditional services charges such as SMS. It also observed that nearly one-third of telecom companies’ incremental revenues are coming in from their data services. Further, TRAI officials said that there has been an increase in the realization rates of VOIP services as well.

Market estimates show that in the last four quarters, VOIP and messaging applications have eaten into about 42% of SMS earnings of telecom companies, and about 19% of revenues from voice services.