India’s Telecom regulator TRAI has mandated that for activation of mobile value added services, across types of scenarios – Outbound Dialer (OBD), Voice Portal (IVRS), WAP, Mobile Internet, USSD, SMS and Telecalling, or any other method – telecom operators need to provide a system which takes a second consent from the customer before it is enabled. The notification stipulates that “The first offer of a service is on the service providers’ platform and a second confirmation from the customer is through a dedicated consent gateway which is owned by a third party and not by the service provider.” This means that when a consumer subscribes to a service, the request will first have to go to the service provider, and then to a third party for a second layer of confirmation. In addition, upon activation of VAS service, the de-activation number, the validity of the VAS service and charges for renewal should be explicitly informed.
– Our take on Activations:
There will be a significant decrease in subscriptions. The attempt from the telecom operators was to taken on the responsibility of activations using a centralized gateway, saying that they will take responsibility of confirming a subscription. The TRAI has accepted that by making the telecom operator the first port of call, but mandating a second factor of authentication that is not managed by the telecom operator makes the whole procedure complicated. There is a clear hint here that the TRAI does not trust the telecom operators, when it says that the second confirmation needs to come through “a dedicated consent gateway which is owned by a third party and not by the service provider.” Ouch. In fact, the regulations specifically note:
“(a) value added services were activated by the service provider, without the explicit consent of the consumer, when the consumer was browsing internet on his mobile and he did not get opportunity to know the terms and conditions of such value added services…”
It’s worth noting that TRAI’s new activation-deactivation guidelines include billing via the Mobile Internet, but only those which integrate telecom operator billing; this is in line with what we had suggested last year.
– Deactivation: In addition, a common toll-free de-activation number is being mandated (155223), and the TRAI has said that all requests for de-activation have to be completed in 4 hours.
– Auto Renewals: information about auto renewals have to be provided to customers through SMS and Outbound Dialers, 24 hours before its renewal.
Our Take: The fact that auto renewals are not being stopped is a positive sign. It means that once you’ve got a customer, you can keep her on the service without having to resubscribe every month, means that VAS companies can focus now on life-time-value of customers.
– Wrongful Activation: The amount shall be refunded within 24 hours of the customer’s request. Customer requests need to be made within 24 hours for value added services with validity of more than one day and within 6 hours for value added services with validity of one day.
Our Take: The limits put, in terms of time, on customers canceling wrongful activations, are reasonable when it ocmes to monthly subscriptions and 24 hours. I do fear that the one day validity service offering might have room for abuse, but with double confirmation coming in, that is also less likely to happen. It is likely that the second confirmation is going to take place via USSD or IVR, which is what OnMobile MD & CEO Mouli Raman had said a few months ago.
– SMS & USSD Activation: In case of USSD and SMS mode of activation, no activation response time should be greater than 10 seconds and 60 minutes respectively and in case of non-response, the same should be treated as ‘no activation required’.
The regulations point towards misuse of USSD as well: “(b) the service providers are sending messages through USSD, offering value added service to the consumer, and in some cases, “no response” from the consumer was treated as consent of the consumer to subscriber to the value added service…”
– Reports: Monthly report on activations, de-activations and complaints received and their redressal to be submitted to TRAI:
a. The number of mobile connections in which the value added services were activated
b. Total number of complaints received, relating to value added services
c. Total number of consumers from whom complaints, alleging activation of value added services without explicit consent were received
d. Number of consumers from whom complaints were received within 24 hours of activation of value added services, alleging that they have not requested the activation of the value added services; and
e. The number of consumers, out of total number of complaints received alleging activation of value added services without the explicit consent, to whom the refund was made,—”
Well, given the scale of corruption, and the fact that many VAS businesses in India were built on deducting money from prepaid user wallets without their consent, this was expected. VAS is a declining business, data is a growing business. VAS businesses need to change.
Note: we’ll update with more on activation processes.