At VAS Asia last week, Rajat Mukarji, Head of Corporate Affairs for Idea Cellular, appeared to suggest that it is unlikely that Indian telecom operators will follow the path that their peers in the US have, of pushing for unlimited data usage. Mukarji mentioned that the iPhone and its huge, unprecedented usage for data and applications broke the back of networks like AT&T, and in return hardly earned anything from it. They have to restructure their networks in order to accommodate the demand for data. It’s likely that Indian operators will choose not to play the role of a dumb pipe. At the same time, earlier in his talk, Mukarji mentioned two other issues that telecom operators in India are likely to face in the future:
– How are telecom operators going to communicate their basket of services to an end user? The future is huge, but the complexities will be more.
– How are telecom operators going to price these products?
Our take: Standardize
The two situations are interrelated – because telecom operators don’t want to just play a pipe, want control over the services that are launched on their network, they have to fix prices and develop promotional plans for services. Obviously, with the spray-and-pray model in operation, with thousands of services being tried out across circles, this is incredibly complex. As Viren Popli, then SVP (Mobile) for STAR India said a few years ago, telecom operators are like a toll gate that is determining a revenue share on the basis of the value of the goods that go through.
Lack of standardization will limit scale and restrict product innovation to those few (10-15) VAS companies that work closely with telecom operators; we’ve heard of instances of telcos asking some companies to come through other (larger) VAS companies for deployment. Frankly, price determination is best left to the entity that creates the product and with an ear to the ground. Current practices certainly aren’t open, flexible and conducive to growth
Instead, why not have a standard revenue share for billing, putting the onus of pricing, launching, promoting and monetizing the service on the company creating the service. With standardization, off-deck mobile web services will also be able to use operator billing for their products and services, giving telcos a wider base of products and services, instead of worrying about how and when to launch and promote a service, and think of ways of enabling discovery?
About using the US example so suggest that telcos should not play the role of a pipe: It’s unlimited data plans that can hit the telecom networks, not openness and standardization. Not every application developer or service provider will take the risk of doing what MyToday is, and implement complicated off-deck billing.
P.s: an interesting point mentioned by Mukarji in his talk: “The most critical element of changes in service delivery has been advancement in compression, which took place in early 2009. Idea cellular was able to beam mobile TV on 2G networks thanks to compression, with some buffering.”