wordpress blog stats
Connect with us

Hi, what are you looking for?

Live Report: TRAI’s Open House On MVAS

So that’s that. We might update with statements we “overheard” post the session. Couldn’t over our comments, and lets just say that we got into quite a few arguments (rather, polite disagreements) with many there (mostly operators) in the interest of creating an open ecosystem. Too bad we couldn’t cover our own comments, eh? More later.

The comments made, in reverse chronological order:

12:56: Manish Gupta, Sistema Shyam: these services will outstrip the any existing VAS, so let free market operate. Give market forces a chance.

12:55: AUSPI: Should not define pricing for utility services

12:51: BSNL: Utility services are concerned, two aspects need to be looked into. Handset regulation should be on manufacturers so that GPRS handsets should be available at minimal cost. Any VAS services on GPRS, customers are doubly charged – content provision and GPRS. Once he is paying for content, he should not be charged for GPRS. Services like M-Education , there is disparity in rural and urban.

12:48: IAMAI: Regulation of tariffs for utility services at initial stages could not be beneficial.

12:47: Sridhar from Sasken: Utility services will be through public private partnership, and we submit that specific long codes and short codes be provided. If it is web based service, then the access of that service should not be blocked by operators. In terms of tariff, I dont think we can come up with any tariff for this, but it is possible to provide a cost based ceiling price, because it is for the masses.

12:46: we move to the last question – Utility MVAS

12:44: BSNL: This entire VAS application, let there be a common developer gateway, where VAS companies can have their content being providers, and there be an operators gateway, third would be an access gateway, where customers can choose to get mobiel.  At least all the developers will have a level playing field.

12:40: Vodafone: you need a piece of paper that the short codes are being used by these companies. Operators are responsible for all content that goes through their networks, for every word.

12:37: Sriram from Four Interactive: if you take the Internet analogy and you’re able to have advertising, and I want tog ive my contnt free, and the consumer just pays for SMS, and the entire billing can be kept by the operator, and you make money from SMs. You cant do that today.

(sorry for an interruption. was arguing for an open ecosystem)

12:23: Rupal from Vodafone: To find a common short code is a challenge for VAS companies because you might find one short code available across SMS and IVR in 2-3 short codes. It is about availaiblity. The second thing is also about opening a short code to somebody at all. I think the onus of what happens in that short code is completely of the service provider. Even a small mistake, the operator takes the flack for it. If there is a legal case, we’re the ones who spend on legal costs.

12:21: Onze technologies: The issue is real for small VAS players like us. We launch a service on a 10 digit number, but the issues with that is that the new NCPR regulations apply to long codes, not short codes. We feel there should be some centralized mechanism for short codes, so small players can get access to them.

12:20: AUSPI: the current framework is working well, and DOT should retain common number series. Other than these short codes, others should be through service providers. VAS providers can set up a 10 digit code for their services, so there is no need for provisioning.

12:19: BSNL: It will be easier for customers to have the same service across operators. But in terms of open access, I dont know what revenue share I’ll have, and whether it will be lucrative enough.

12:15: Rajan from Mobile Monday: I would request that some sort of SLA’s should be mentioned. The opening up of the short code takes very long, and the actual realization takes very long. It has to be opened across all operators and it takes two years.

12:14: Spice: It has taken us three years to open the short code for Indian railways across operators, across delivery platforms, despite it being a class one service. We support this.

12:13: IAMAI: Should have an independent short code system, and we support the open access system, and we would be happy to work with the regulator on more inputs. Single number assigned to every service providers

12:11: Sridhar from Sasken: Opening of the short codes is preferable, but I would like to draw your attention to the future of VAS. Since the applications are going to be accessed on internet access, revenue sharing is not important, but whether access to services will be restricted by telcos. There is no mention of net neutrality here, and we need guidelines on net neutrality, which should not be blocked by operators due to higher bandwidth. The future of VAS should not be restricted to short code based services.

12:09: Mobile payment gateway system issue needs to be addressed, which is why there is revenue share.

12:08: Rajan from Mobile Monday: The Indie developer doesn’t stand a chance until revenue share is addressed, and a fair playing ground is not made available. I understand the pain it takes to set up an SMSC, but unless there is a fair playing ground for the indie developer, the VAS company cannot go to the next orbit.

12:00: Vodafone: Not possible to set up a business in two weeks. It is not the same as the Internet, because you’ll have deliver content to 100,000 types of handsets.

11:55: Rajan from Mobile Monday: Not seen any developer being able to change the revenue share regime. In terms of the guidance of doing this revenue share – I heard some answer. What an operator brings is three things – billing, marketing and customercare, which an operator has dominance on. If you say that you bring only one of this three. If I pick only one, there is a particular revenue share. I would see that billing should be in line with payment gateways. In terms of moving the MIS, it is an issue with the consumer as well. Most of the points are supply driven. We have to incentivise the buyer. Today nobody understands what the buyer is paying for. In prepaid we dont know what the billing is. Issue a guidance that operators that consumers can receive guidance.

11:40: Sarma: If network costs are already taken into consideration with respect to certain matters, does the revenue share mean that you’re getting additional advantage – fair enough – and is that proportionate to the investment that you’re making in making available the VAS to the customer.
Also, how much return does it give to the VAS provider himself, if it varies between 10% to 30%, but across applications, to each service provider, what is the return? Is it giving return to the application provider. Is this an industry which more and more people are in a position to enter into.

RCOM: The work starts form the OSS, BSS platform, the service delivery platform and its maintenance, then the packet core of the network, then the transport network, where the transport and traffic generates across the network, apart from the access network at the end of the day.
In terms of return on investments, I cannot answer this question because it is high.

Vodafone: the subscriber management cost, the network cost, the service delivery cost, the content comes from a different source, and the application platform cost as well, marketing costs on our own but digital platforms and retail, and the cost of customer value management. The product, while it is being created, there is a lot of work that is put in at the operators end. it comes from companies and individuals for whom. the Internet is very different from the mobile, and if it is SMS, most handsets can have 160 characters. one of the biggest news brands in the country dont know how to make it viable engaging, correct to make it viable. you asked about returns, how do we segment, and which segment requires what kind of service. putting content on a platform is not going to do the job. search and discovery is extremely important. these are the growing and increasingly growing costs and investments. also returns to vas providers,there is interest from new players to get into this business. here, we are for instance investing in creating an open application platform. the apple platofrm was the biggest success story. there is evangelization that is happening, in terms of mobile application awards, telling them how to go about the business. Also, on an ongoing thing, for existing VAS providers, the feedback that goes to the operator, in this circle, this district, these customers had a higher conversion rate.

11:37: Sarma: what is revenue share based on?
RCOM: It depends on what is the scale that it is likely to give us, in urban, suburban, and where it will appeal. We agree on a certain principle, between 5 million-20 million, and based on the expected revenue, we left it to revenue share. We’re taking the risk of supporting these applications, even if the company fails. We do extensive testing, and we support the value added service providers in terms of security and scalability. I haven’t seen any view, though at times there are disagreements in case of MIS figures.

11:36: RCOM: Revenue share should be left between operators and VAS providers. We haven’t seen a view that they’re not getting due revenue share. It varies from application to application.

11:32: BSNL: There is a good understanding between operator and developer. As the type of content keeps varying, we don’t know what kind of inputs will lead to development of these services.

11:31: Manish Gupta, Sistema Shyam: I don’t see cartelization fitting in, given that this is a 14 player market

11:30: AUSPI: PK Sharma: VAS providers have enough choice in this competitive telecom operator environment. It would not be feasible to eliminate differences in MIS given that both entities operate on different databases.

11:29: Idea: there is a lot of grey in terms of what the operator has to bear in terms of image, branding, co-production, which is not tangible, and it should be left to the operator and the content provider. If there was an open market, then marketing would be like deep sea fishing, because operators bring customer knowledge.

11:27: Bharti Airtel: We as marketers also participate in creating production, and the process of co-creation and equal sharing of responsibility between telcos and partners should not be ignored. It determines the way revenue share works. In cases we’ve bet on products where we have bet on marketing. We’ve created a partner ecosystem, and this should be left to telecom operators and partners to negotiate on.

11:23: COAI: this is putting the cart before the horse. If you look at how the VAS company becomes successful, the revenue is the last step. There is R&D, service provisioning, qualification to provide the service and consumer marketing. We are the theatre owners which house the content and the producer shouldn’t determine the price whether it is a hit or a flop. This ignores the cost which goes into an equitable revenue share. look at rural rollout. security cost. the cost if something goes amiss in VAS. quality of service – how do i disaggregate, I bear the cost at the front end in terms of customer service and customer acquisition. Market dynamics should play a significant role. On the issue of reconciliation, this is not unique. In terms of the ordinary contract there is an audit provision.

11:21: Bharti: we feel that VAS providers get their due share. Each VAS is unique, and a lot depends on content, and it’s a function of copyrights, innovation. regulating VAS would be micro regulation. It’s a dynamic process, and left to the market process. Secondly, I would say that there is no global precedent for regulation of revenue share. In terms of differences, even the IUC settlement there are differences, and this is routine, and this can be addressed with strong reconciliation, and this doesnt’ call for a regulated revenue share.

11:20: Ravi Kumar from BSNL: The revenue share should be performance based, and not on the basis of acquiring more customers. Complaints – the content provider who provides content with minimum complaints, should be taken into consideration for revenue share.

11:15: Vodafone: The cost of content starts at some point of the chain. The first thing that you have to consider is that while acquiring content, the same play is at the other end of the chain. As far as revenue shares go, there is a science and a logic. It’s not two kids saying that I want a bigger candy. The cost of collections – the bad debt is not passed on to content owners, and you’re forgetting a key part, which is the application or platform provider. As far as pricing is concerned, there is no cartelization at all, and it is down to what consumer can pay. There is no cartelization, and I have to set that right completely. How would regulation on revenue share happen? Would you pluck it out of the air? Regulating revenue shares cannot work. Most operators have to depend on their partners for MIS, and not themselves. We’re waiting for our partners to send us MIS info.

11:11: Anil from Viacom18: while looking at entertainment in case of VAS, we are plagued by revenue share, and we are left with the least revenue share of the pie. We are in a weak position because of cartelization of telecom operators. We are left at the mercy of the operators, and when you look at VASPs, since there is no particular revenue share mechanism, and since we are unable to negotiate fairly, we are left with a mere portion of the revenue. This doesn’t incentivise a content owner to develop entertainment VAS. Secondly, entertainment can be considered as a separate sector for the purpose of regulation of revenue share. The content owner incurs cost to provide content, while in other sectors the cost may not be that substantial. It is the need of the day to have a proper MIS report, and a reconciliation mechanism. The MIS reports and reconciliation take a substantial amount of time. Even after such a high revenue share, only the revenue collected by subscribers is being passed to content providers,and even the bad debt is also being passed on to content providers. We don’t have a direct contract with subscribers.

(break: I was sharing medianama’s views)

11:04: (no name): Issues of IPR on the web will come into the picture. There is no licensing regime that is addressing IPR

11:02: Vijay from OnMobile: It would be pertinent to understand the scope, definition and reach of licensing.

11:00: Bharti Airtel: As speeds increase and screens become larger, customers are moving from SMS and Voice to Data. The content on the web and the pricing on the web and the market dynamics are free. Are we talking of licensing the web? As a marketer, I’m trying to figure out where customers are consuming VAS. The customer has shifted his consumption to a different medium.

10:59: Priya from Idea: The need is to look at organic growth. It is important to give way to new setups and startups because the growth of VAS would thrive on innovation of the content provider. However, it needs to be regulated because we’re looking at organic growth. The customer of MVAS is the customer of the service provider, and there is pressure to ensure that there are robust redressal mechanisms.

10:57: Gajendra from Vodafone: The need to bring the VAS industry under a licensing framework is not required. It would end up stifling innovation because of license fee, need for interception, and it would end up stifling and killing the creativity, which might otherwise command a premium. There would be no scope to go outside the mandate, and no scope for additional charges that a VAS provider could command a premium. Therefore, it would also be to the detriment of the VASP

10:54: AUSPI: No separate category of license for MVAS. The current regime is fine. MVAS is not covered under Indian Telecom Act, so licensing would be inappropriate.

10:51: Manish Gupta, Sistema Shyam & AUSPI: Licensing will mean a uniform licensing fee, and if there is no fee then there will be issues of fine. I’m sure that most MVAS companies dont want licensing. There are 300 ISPs who are licensing, but I’m sure that you’re not getting reports from them.

10:48: COAI: Not sure how the MVAS industry is being stifled. It is in our mutual interest, and we would recommend a light touch regulation to continue. One of the particularities of non licensing, we dont know whether the government has the right to license something it is not parting with. The existing ecosystem in the service provider category, there are 12 service providers, so we’re not sure where the issues are, it is competitive. If it continues, and there is healthy competition among service providers, there will be competition in MVAS. MVAS service providers do not know what it means to be licensed. I believe it is in the overall health of the MVAS industry to continue to be unlicensed.

10.40: Four Interactive (name not clear): My understanding is that if it is license and regulated, dispute resolution between consumer and service provider is easy, and VAS and telco is easy, and maybe it is easier to provide services to consumers. In terms of dispute resolution, and telecom companies are large, and to address dispute resolution, and I’m not sure how smaller companies like ours can create such a large redressal mechanism. In terms of dispute resolution between VAS and telcos is driven by economics. It can be improved. In terms of having an open access for VAS to provide VAS to consumers, there are two services – an open platform with smartphones, which is similar to the Internet, and on the Internet, there is no need for licenses. That holds true for smartphone businesses too. On the other hand, there are services that require telco infrastructure, any license we put into place will not solve the problem of telco integration.

10:38: Hungama: I’m a little concerned when you say that VAS is brought under the regime, and would like to look at cinema, television and advertising perspective – none are regulated from a content perspective. the best way to allow it to thrive is to allow free market operations, even though there is regulation of the distributors of the content.

10.35: Deepak Maheshwari: VAS has been evolving in early 90’s. It is natural that ARPU going down, considering many people have multiple SIM’s. we’ll have to look at who all will have to register, and which services will have to be brought into the MVAS registration.

10.33: Licensing process should be more vigorous. More quality services should be bought along. Every operator wants to offer the same kind of services. We should emphasis more on concept based services.

10.29: Nikhil: we should look MVAS as digital content. MVAS is a very broad industry which would lead to clash between regulators. There is very limited in vc fundings in startups dealing with MVAS unlike other startups like Flipkart. Other companies donn’t want to enter VAS business since its very restrictive.

10.27: Sasken: Is it possible to include VAS as a registered service like other countries like Singapore? They are suggesting that it should.

10.25: 37 comments were received till now. First issue i.e Licensing is being discussed right now. Question is whether the licensing framework should be brought in place.

10.22: JS Sarma has asked the house to how long the house should go on, saying that TRAI can go on till night.

10.20: Wherever necessary we will be bring in an regulation, else we will give a recommendation – JS Sarma

10.18: Value added services are being activated in a way consumers are at problem. Developers are being shortchanged. For instance, a film producer will earn a lot of money from MVAS, app developers get only 5% of revenues. – JS Sarma

10.15: We are looking at 10% growth rate. Digital technologies play a crucial role. We should grow in an orderly way – JS Sarma

10:13 AM: And we’re off

10:01 AM: Overheard (and loud): Regulatory rep from Delhi, probably looking at the lack of attendance at the session, says to TRAI representatives – why Bangalore? You should have kept it (this session) in Ooty.

9:50 AM: Overheard: “A sense of discipline is also driven by a sense of fear”.

Before we begin: We’re at the TRAI Open House Session on Mobile VAS at the Atria Hotel in Bangalore. We’ll update through the session with information on what representatives of various companies are saying at discussion. The word on the street is that the TRAI doesn’t want to license MVAS, given overwhelming views against it in the responses to the consultation paper. Read our views here.

You May Also Like


The Delhi High Court on Monday refused to stop Amazon from pushing regulators to stop the sale of the Future Group’s businesses to Reliance...


Pine Labs has raised around $100 million in fresh funds from Lone Pine Capital, a hedge fund based in the United States, at a...


Restaurant aggregator and food delivery company Zomato has raised US$660 million (over ₹4,850 crore), taking its valuation to ₹3.9 billion. CEO Deepinder Goyal tweeted...


Minister of Road Transport and Highways Nitin Gadkari said on December 17 that GPS-based tolling will replace toll plazas in two years, The Hindu...

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

© 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to Daily Newsletter

    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ