On the OnMobile Global conference call, its MD (and now also CEO) Mouli Raman, in response to much prodding from investors about the impending impact of TRAI’s Mobile VAS guidelines, explained how the regulator is planning to relax the guidelines:

The user, on choosing to activate a service via a mobile VAS company, will be taken to a telecom operator landing page for confirmation, or (we guess) prodded a second time for a confirmation via USSD, which is from an internal telecom operator subscription manager. Thus this will amount to double confirmation of subscription, independently verified by the telecom operator. “When you say ‘buy’, it will take consumers to an operator pipe, where information will be given, and (the) confirmation will be from the operators pipe.”

Airtel executives, on the companys conference call, had said that subscription engines and outbound dialers have all come under the controls of the company, affirming this, and that they’re happy to confirm the customer via USSD (which, incidentally, is only available on GSM, so this solution doesn’t work for CDMA operators). The company executives pointed out on the call that nobody has implemented the TRAI’s “methodology of snailmail to confirm”, a claim which is misleading, since snailmail was one of the options; SMS was also included.

“The deadline has been set in,” Raman said on the OnMobile call, adding that “The deactivation guidelines have been implemented. There’s a common number across operators which is being publicized now. The activation (guidelines) should be rolled out in the next week, (but) there is some latitude on the activations.

But What If The Telecom Operator Is Dishonest And Disingenuous?

The latitude on activations is an issue. What if the telecom operators is dishonest. Through this set of guidelines, telecom operators are clearly passing the buck to Mobile VAS companies, but even as they blame mobile VAS companies, the VAS companies (albeit not publicly) have always blamed circle heads at telcos. Eventually, telco’s pocket most of the money on MVAS, and frankly, they need to be disincentivised as well. TRAI is either naive or foolish to allow them to pass the buck to VAS companies, without penalizing them.

Why? Because despite the posturing on the conference call, some things don’t change: Airtel continues to bill customers via click to charge, without double confirmation. I’ve been charged twice because I accidentally touched a banner, and subscribed once without confirmation. TRAI guidelines might not apply to the Mobile Internet (we think they should), but if Airtel was genuinely concerned about their customers being billed, they wouldn’t implement click to charge.

Meanwhile, it’s business as usual for Tata Docomo; it hasn’t changed its spotty self and is still charging my colleague Brindaa Lakshmi without activation, despite repeated complaints on Twitter.

Even with the double confirmation system, what prevents a telecom operator from fudging their logs?

From what we’ve heard, Vodafone has already implemented, for the Mobile Internet, a double confirmation system. Other telcos need to clean up their act too, and the TRAI needs to take errant telcos to task.

However, we’re not sure if the TRAI will hold telcos accountable, though: if you take a look at previous policy decisions, specifically in case of Bulk SMS and SMS Spam, the TRAI has policed telecom MVAS by letting telecom opertors off, and penalizing their vendors.

Impact on MVAS

The change in the system will provide some relief to mobile VAS companies, for sure: Raman said on the OnMobile conference call that they expect a bit of a hit in the current quarter, and that things will stabilize next quarter onwards. OnMobile, this last quarter, has reported a 28 percent decline in India revenues.

The split between Data and Messaging plus Mobile VAS for Airtel has changed over the last few quarters too:

The VAS and Messaging revenues have consistently been declining, while data revenues have been consistently increasing.