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MediaNama’s Final Recommendations To TRAI On Regulation Of MVAS

Today is the last day to submit comments to the TRAI, on the consultation paper on the regulation of Mobile Value Added Services. Please mail your responses to the 10 questions posed (details here) to advbbpa@trai.gov.in or bbpa@trai.gov.in by the end of the day today. We’ve already submitted our recommendations, which you may view here (or download a copy here).

We’ve given suggestions keeping in mind the need to address the following issues:
– Lack of significant interest among Internet companies to launch mobile VAS offerings
– Need to bring billing for content and services on mobile in line with m-commerce, in terms of verification.
– Need to bring telecom operator billing in line with payment gateway guidelines of the Reserve Bank of India, to enable clearances of payments.
– Limited venture capital investment in Mobile VAS companies, which has been limited to a few well entrenched players
– Need to define a policy that takes into account digital ubiquity, independent of access service provider, whether telecom operator, ISP, BWA or DTH operator.
– Lack of transparency in customer billing, which results in services and being priced inordinately high.
– Cartel-isation among telecom operators when negotiating revenue shares
– Payment delays and billing disputes between VAS companies and Telecom Operators
– Limited customer options, in terms of number and types of services available
– Need for MVAS businesses to own their identity (short code), and own a single short code across telecom operators, so they can have the confidence of investing in it.
– Lack of freedom to mobile VAS companies to change customer pricing
– Bureaucratic processes which prevent the provisioning of Mobile VAS, thus limiting customer options.
– Lack of alternative billing mechanisms, apart from prepaid balance based billing on mobile, or postpaid billing.

At the core of our recommendations, there are three key changes:

a. Separation of ownership of identity of the Digital Service Provider/MVAS company from provisioning by Access Service Provider/Telecom Operator by creating a Common Short Code Registry, governed by a Common Short Code Registrar. At present, Digital Service Providers/MVAS companies do not own the short codes they operate.

b. Separate billing for services/content from access charges, to bring transparency and standardization in consumer billing, and independence for the Digital Service Provider/MVAS company from Access Service Provider/Telecom Operator. We would recommend the removal of the existing revenue share mechanism as a means to ensure ubiquitous pricing mechanisms across digital platforms.

c. Enforce provisioning of independent mechanism for verification of billing, in order to address MIS issues, and bring billing for content and services in line with Mobile and Online Banking guidelines from the Reserve Bank of India, as well as regulations governing payment service providers.

The one significant change from our draft is that we’ve recommended that the TRAI, following the separation access charges and transaction fees from charges for content and services, also recommended that the TRAI direct telecom operators to operate billing for content and VAS in the same manner as payment gateway service providers / prepaid payment instrument service providers are mandated to do by the RBI – clear payments in a 2-3 day payment cycle. A faster cash-flow turnaround will encourage more businesses to invest.

We’re aware that these changes might impact some companies adversely, but we’ve made these recommendations with the objective of enabling a much larger and healthier digital ecosystem, built on the basis of open competition, rather than cartels and bureaucracy.

Our recommendations (download a copy here)

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