TRAI has once again raised the issue of net neutrality and differential pricing with a new consultation paper calling for industry suggestions. In the paper, released last week, the regulatory body seems to be looking for alternate solutions to the contentious issue of zero rating; one that does not involve a discriminatory pricing model by Telecom Service Providers (TSPs). TRAI has asked respondents to send in their suggestions by June 16, 2016, with counter comments byJune 30, 2016.
As it is known, earlier this year, TRAI, in a ruling prohibited TSPs from offering differentiated pricing models on the basis of content. Basically, TRAI did not want TSPs to start controlling prices charged to consumers.
However, a number of operators have approached TRAI claiming that this policy is restrictive and counterproductive as it would not provide opportunities to app makers to promote their products. Just last month, Airtel approached TRAI to clarify whether it is allowed to tie up with a foreign content creator to provide exclusive content to its subscribers.
This has probably prompted the TRAI to try and find out a compromise that will be acceptable by TSPs, while at the same time, not jeopardize the concept of free internet.
What are the options?
TRAI, in the new consultation paper has asked four questions. One of which is whether there is a need to have a TSP agnostic platform to provide free data or suitable reimbursement to users, without violating the principles of differential pricing for data laid down in TRAI regulation? And, if yes, then should this platform be monitored by TRAI or should market forces be allowed to regulate it.
“It is quite clear that TRAI is exploring options for a zero-rating platform without the possibility of differential behavior by telecom service providers. In effect, the content provider still remains the paying party (thereby zero cost to consumer) but not tied to a particular telecom service provider. Besides the views presented in the response to the consultation paper on differential pricing, there is a trend towards offering/demanding free data across many markets in the world. In a recent survey commissioned by CTIA, Americans voted for provision of free data or access to content without affecting their data plan. I guess, such trends have motivated the regulator to explore free data options for consumers, without a telecom service provider controlling the access,” said Amresh Nandan, Research Director at Gartner.
When asked whether, as TRAI asks, there are alternate modes of offering free data to customers without letting the whole system be controlled by the TSP, he agreed that there are a few platforms which do something similar to what TRAI wants available in the market.
“A platform launched in MWC (Mobile World Congress), Barcelona this year allows telecom service providers and other businesses to create advertisements that offer consumers free mobile data for interacting with advertisers. Similarly, another platform provider enables consumers to access and earn mobile data through mobile marketing business of telecom service providers. However, to the best of my knowledge, none of these have been implemented in quite the same way as TRAI has proposed,” he said.
TRAI, itself, has admitted that rewards-based models based on a TSP-agnostic platform, could be a possible solution. “There are some examples of reward based models in India, most notably: (1) Discovery Apps dedicated to providing rewards in return for engagement; such as mCent, Gigato, Taskbucks, Ladoo, EarnTalktime, Pokkt and many more and (2) Rewards platforms that can enable any app/site to offer rewards for desired action or even mobile data rewards for everyday activities like paying electricity bill on time or checking out of the hotel on time etc.,” said the regulator in its paper.
TRAI also noted that other models like direct money transfer model and toll-free model could also be considered. However, the important thing here will be whether these models can be applied on scale.
“Without getting into the aspect of net-neutrality (i.e. whether these models support or violate the principles of net neutrality); I would say that, there are platforms that can be augmented to achieve this. However deploying such a platform and interconnecting with TSPs is not straight forward, owing to API based partner communication, settlement of billing / data usage and therefore changes required in service delivery as well as other components of a telecom service providers’ BSS platform,” points out Nandan.
Also, there is the issue of who will monitor and regulate these platforms. Should TRAI be solely responsible or should it be left to the market to decide? According to Nandan, the ownership, maintenance and monitoring of such platforms is tricky business and hence it would require TRAI to work closely with the party that hosts enables, manages, monitors the platforms and provides report to various telecom service providers, content providers and regulator.
However, whether TRAI will be ready to take up this additional responsibility remains to be seen. On the other hand, the fact that TRAI has decided to look for a solution is interesting as it shows that the regulator is not blind to the wants of operators; something a few have been murmuring about after the landmark decision on differential pricing.
The onus is also on operators though, to find out new, innovative ways of monetizing their service in order to remain competitive, without spoiling the experience of their consumers.
“The TRAI ruling (on differential pricing) has re-emphasized the fact that marketing reach and consumer insights of telecom operators has influential power in the industry and thus they faced the injunction. In the wake of this development, I hope telecom operators themselves truly realize the potential of their marketing reach and consumer insights too. If they do that, they will see that there are a number of alternative options available to them to monetise their marketing reach and consumer insights even post ruling,” opined Abhay Doshi, SVP (Marketing and Product) at Flytxt.