Since last November, we’ve been hearing buzzing noises about “OTT services” being “preferentially charged” by telcos. What this means in plainspeak is that if you make a call using Skype, believing that it’s “free“, you could actually end up being charged more by your telecom provider than if you had made the call by phone. This move by the telcos comes as no surprise, at least to people who understand that someone is as likely to give you free communication as they are to give you free beer or a free lunch.
From the telecom providers point of view, revenues that were earlier available through international calling are now being eaten into by services like Skype and they are simply trying their best to put up a fight.
In countries like the US and the UK, telecom companies seem to have made their peace with the fact that technological innovation is the enemy of secured revenue streams. As a result, telcos in these countries make it possible for people to use phones that would be normally out of their budget by promoting contract plans, where the user can only use the phone as long as he/she stays on the same provider. Telcos in these countries also make most of their money from enterprise customers who are too snooty or too paranoid to use free services like Skype for business calls. Lately though even these trends have been challenged, with enterprise players like Microsoft entering the cloud space.
In India on the other hand, the telco business has always been monopolized by a very small set of companies. In the initial stages of the Indian telecom boom, it looked like India would be the poster child for the mobile phone revolution. However, in subsequent years, licensing and pricing wars on a background of murky and ever-changing trade practices have ended up limiting the telecom industry to a fraction of it’s true potential. India’s spectrum licensing policy renders it impossible for communities, small businesses and other non-enterprise players to operate low cost telecom equipment like OpenBTS, meaning that there is no alternative to the services provided by telecom providers, even for local communications. This is true even in areas where telecom providers do NOT provide services or provide substandard services. As a result, people in service dark regions are forced to resort to purchasing a connection on every telecom provider in the hope that at least one will work. This dark side of the telecom provider space is reflected in the recent proliferation of low cost cellphone models that support multiple SIM cards, sometimes 4 or more. At the same time, people in service rich areas are now able to participate in online gaming experiences – off their TV sets.
With the possibility of preferential pricing for so called free services, people in service rich areas are being forced to wake up and smell the coffee. From our point of view, nothing could be better. So here’s our top 10 reasons why TRAI should go ahead and allow telcos to price control the Internet as much as they like –
10. Big, instant hike in GDP…since most of India’s internet users live off OTTs like Viber and WhatsApp, paying telcos more would allow ALL of us to contribute that much more to the national goal of 8% annual growth. Facebook should really add a cash-register “ka-ching!” every time a like is clicked.
9. Less “terrorist” attacks – This is a roundabout one, but a solid one nonetheless. If TRAI, i.e. the Govt. needs to regulate the tariffs of different internet services, they need to know which packet represents which kind of service. That’s only logical after all, how can you regulate what you don’t know anything about? So, in order to regulate, the Govt. must know what’s in which packet. Considering they’re going to that much effort (and it’s a LOT of effort analyzing packets), they may as well use the data gathered for national security purposes as well. Privacy of citizens is simply collateral damage, which is unfortunate, but necessary.
8. Money to be made on the media debate – Indians love debating. Indians love watching TV. Indians love being watched while debating on TV. Lately it’s fashionable to talk about free speech…and unfortunately the Cricket World Cup HAS to end one day, leaving a gaping hole in advertiser incomes that must be filled somehow…this debate could contribute to those revenues.
7. Telcos can make more money – Come on! This one’s a no brainer…don’t we all want the biggest business dynasties in India to make yet more money? We couldn’t have already reached the pinnacle of obnoxiously expensive yet aesthetically pathetic housing, travel and leisure options for the rich and famous.
6. Less spam – with OTT services becoming more expensive, people will hopefully use them less…or less people will use them, which means that much less spam! Bye bye WhatsApp shayari and bye bye porno bots on Skype!
5. Less cloud hype – Cloud computing has been hyped up as the future of….well pretty much everything. With this development, that bandwagon is going to feel the brakes! How many people would want to store their data on the web if accessing it was more expensive than accessing data on a local drive? (That’s a trick question, it’s always been more expensive to access data online than on your disk)
4. More piracy – When it’s no longer convenient or cheap to watch videos off YouTube, more people will rip content off the net for peer to peer sharing. Just the way multiplexes making it prohibitive to watch movies have made the pirated CD market boom, so will preferential pricing make peer to peer sharing go crazy
3. OTT Providers will become richer – If TRAI insists on a revenue share between OTT providers and telcos, it might end up becoming very profitable to set up free-to-lure-you-into-paying services like WhatsApp and Viber.
2. More ways to show off – by first jacking up the price of something that should have been free to start with and then offering it for free to certain groups of people while claiming it as a business expense, telcos and OTT providers can now get out of actually spending anything on CSR. Providing free WhatsApp could now be on election agendas, just like free power and free food
1. Strengthens the case for mist computing – Hopefully moves like this will help wean more and more people off the illusion of free products and services and drive more towards building community owned and operated networks for data sharing.