wordpress blog stats
Connect with us

Hi, what are you looking for?

TRAI Open House Discussion On Mobile VAS – Off-Deck vs On Deck, Licensing, Interconnection , Dispute Resolution and Revenue Share Threshholds

The gloves came off at the TRAI Open House discussion on regulating Mobile VAS, and despite the sedate start, VAS companies and mobile operators were clearly at loggerheads with each other. Some important points made:

1. No Network Neutrality of Indian Mobile Networks: Telecom operators block access to services and sites, and there is no unregulated access. The telecom operator decides, instead of being “just a pipe”. Microsoft questioned the neutrality of the operator networks, saying that just like the ISPs don’t block sites unless specified by CERT-IN, Microsoft believes that mobile operators should not block access.

2. Impact on different sets of VAS companies –
— On Deck: are VAS companies that provide white labeled vendor services to the carrier/telecom operator – using his infrastructure, branding and promotions. These include the likes of OnMobile Global, Bharti Telesoft, Cellebrum, One97, ValueFirst and others.
— Off Deck (or Direct to Consumer): are VAS companies that use carrier infrastructure and billing for their products and services, but the marketing and branding is independent of the mobile operators. For example – Indiatimes’ 58888, Netcore’s MyToday, Webaroo’s SMS GupShup, Dada Mobile’s in.dada.dj.

Mobile Operators and their representative bodies – the COAI, AUSPI and others mentioned repeatedly that the issue of VAS is an internal agreement with a vendor, and TRAI should not get involved in commercial agreements or negotiations. Reliance Communications dismissed it as well, saying that “Negotiation is our right”. However, the IAMAI and Atanu Mandal (President, ACL Wireless), said that On-Deck and Off-deck services should be looked at differently. On Deck services form a vendor agreement, but Off Deck has the has the branding of the service provider.

3. Need for an Interconnect agreement and transparent costing: Ajay Vaishnavi, Director Telecom for Times Internet (58888) said that there needs to be transparency for an interconnect agreement between offdeck VAS companies and the service providers. Operators should define a fixed cost – Every operator prices the same service differently to the consumer, so this confuses the consumer. The costing should be transparent. (ed: I think he was also hinting at cumbersome negotiations for interconnect agreements).

Advertisement. Scroll to continue reading.

4. Need for Dispute Resolution Guidelines: Rajesh Jain, MD of Netcore (MyToday) called for clear guidelines and a mechanism for settling disputes, saying that there is only a perception of a fairplay environment (which operators kept hinting at). Netcore’s MyToday services were curtailed for no apparent reason, and there was no way of dispute resolution then. AUSPI (CDMA Operators) responded, saying that the high courts are there for dispute settlements. Airtel said that when they sign an agreement, everything is clear regarding litigation. An operator is like a Big Bazaar (Shopping Centre). The responsibility for the product lies with the content owner.

On Short Code Services, VAS Infrastructure setup, Licensing, the Core Issue and possible solutions –

5. Short Code Services Should Be Like Domain Names: The IAMAI said that the short code services should be like domain names – standardised, easy to get. There is no need for a revenue share model. The COAI countered with a standard refrain – Telecom is the most regulated segment, and TRAI should refrain from regulating commercial agreements. Later on, at VAS India 2008, I was informed that the cellular operators own short codes, and a short code is licensed every year from every operator. It’s very difficult to get the same short code across services, across operators – which is why Indiatimes’ 58888 is a monumental achievement, since they’ve licensed the same number from each operator.

6. Infrastructure: Ajay Vaishnavi said that all VAS players should have the ability to set VAS infrastructure – at present this is an arbitrary choice from the operator side. It should be licensed.

7. To License Or Not To License?: No consensus among, well, non-carriers, on whether VAS should be licensed or not. Microsoft was against licensing – saying that in an era of convergence, rather than getting more services into the licensing fold, TRAI should see what needs to be removed from the license. Don’t let VAS go down the ISP license route. Rajesh Jain (much to my surprise) was in favour of licensing, saying that with an unlicensed regime, there are integration nightmares, blocking of WAP and GPRS access sites; the Industry needs direct to consumer services, instead of VAS service providers. He believes that with licensing will come some formal guidelines of dispute resolution and transparency, and if licensing will ensure that – so be it.

The mobile operators, admittedly, were against licensing – they believe that bringing another license into the value chain is pointless. AUSPI said that a VAS company is like a vendor (Ed: ignored off-deck) – for example, like an infrastructure provider like Ericsson, who has no right to ask TRAI to change the regulation. It should be an open market operation, the market is hyper-competitive anyway. They suggested “Registration” of VAS companies, but not licensing. The COAI used the example of Star India’s Kaun Banega Crorepati (KBC), saying that all is fair and right in content deals. These are market forces in play, and it would be retrograde to license and dictate commercial terms. Carriers should be able to self-certify VAS companies. Reliance Communications said that the TRAI should only come in in case of a market failure, and there is no market failure at present. STAR India also didn’t want licensing of VAS.

Advertisement. Scroll to continue reading.

I found it rather amusing that the Nripendra Mishra of the TRAI, at one point, told stakeholders that even the TRAI is not sure – “Who are we to decide?”, he asked.

Core Issue: The COAI is right – access is at the core of the game, they pay a large license fee for the right to access. They believe that they cannot allow access without terms and conditions. My Take: I disagree with the notion that that gives them the right to price the reselling of the same access in an arbitrary manner. Is there a rate card, or is it based on negotiations behind closed doors? Eventually, the consumer ends up paying for it.

Possible solution: Rajesh Jain, MD of Netcore, Revenue Share agreement should be standardized, and transparent –
— If only billing capabilities of carriers are used, off-deck VAS companies should pay 15 percent and the content provider should get to keep 85 percent.
— At the other extreme, if billing and infrastructure, promotions etc are used, then carriers should keep upto 85 percent, and 15 percent should be given to the VAS company.
STAR India too had said that there should be a minimum amount required for off-deck services, and a percentage of revenue share on billing. Carriers should define slabs, based on discounting and volumes.

He believes that thresh-holds will encourage content providers to create and promote the services, leveraging the operators billing capability. The thresh-holds will help open up the industry to different models for content. At present, because the content providers get a very small part of what the end user pays, there is very little incentive to promote services. If thresh-holds can be created, this can be a starting point.

Interesting that all senior executives from the off-deck companies were at the TRAI Open House Discussion, which those from on-deck companies were at VAS Asia 2008.

Download TRAIs Consultation Paper on MVAS
Download Stakeholder Comments on MVAS

Advertisement. Scroll to continue reading.

Will Nokia Need An MVAS License For Ovi? Thoughts On TRAIs Consultation Paper On MVAS

Written By

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



The US and other countries' retreat from a laissez-faire approach to regulating markets presents India with a rare opportunity.


When news that Walmart would soon accept cryptocurrency turned out to be fake, it also became a teachable moment.


The DSCI's guidelines are patient-centric and act as a data privacy roadmap for healthcare service providers.


In this excerpt from the book, the authors focus on personal data and autocracies. One in particular – Russia.  Autocracies always prioritize information control...


By Jai Vipra, Senior Resident Fellow at Vidhi Centre for Legal Policy The use of new technology, including facial recognition technology (FRT) by police...

You May Also Like


135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...


Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...


By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...


Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ