TRAI likely to study how WhatsApp, Viber & Co have impacted telecom revenues

The rise of messaging and VOIP apps has pleased users and given them a lot of choice, but not everyone is happy, with telcos starting to make noise against the rampant adoption of these services.   The Telecom Regulatory Authority of India (TRAI) too is expected come out with discussion paper that looks at the impact of Over-The-Top (OTT) players such as WhatsApp, Viber and Skype on Indian mobile service providers’ revenues according to a report. The purpose of this paper is to explore the possible direction that the mobile industry in India might take thanks to these OTT players.   An official speaking with the Economic Times said, “We want to understand what direction it will take in the future, what are the concerns of telecom operators and consumers, and if there are any security threats.” The official added that TRAI may look into issue of bandwidth consumption by these OTT players without sharing any generated revenue with the mobile operators.   Telecom companies are indeed a worried lot and there is a genuine reason for it too. They have invested big on infrastructure, marketing, ecosystem practices, promotions, etc., while the OTT players end up gaining a lot of traction without any direct investment towards these costs. The phenomenal rise of instant messaging services like Whatsapp, Viber has certainly dented the revenue generated by these mobile companies through SMS and voice-based services.   It’s said that Indian telecom operators would lose SMS revenue to the tune of about $3.1 billion by the year 2016, thanks to these apps replacing simple text messaging. In fact, recently India’s leading mobile service provider Bharti Airtel has even called for regulation for apps like Whatsapp. It won’t be wrong to say that it echoes the sentiment of other service providers too.   But the co-founder of WhatsApp, Brian Acton says that his messaging service is not a threat to anyone. In fact he insists that he is actually helping the mobile service providers. “I view it from the perspective that we’re facilitating a broad movement to data plans and the entities that provide those plans are the carriers, so they stand to benefit quite substantially.”   It is not just restricted to IM apps either. A survey conducted by market research firm MobileSquared shows an astonishingly high 43 percent of mobile operators view Skype as a major threat to their voice services. It is easy to understand since Skype has 280 million active users per month and according to the firm’s report could end up costing mobile operators about a whopping $ 36.5 billion every year.  Add to it, the emergence of new information that WhatsApp might offer voice calling service and it begins to look bleak for mobile operators.   The rise of cheap data plans along with low-cost smartphones has certainly fuelled the growth of OTT players. But the question is how long will telcos allow this to continue at the expense of revenue. TRAI intervention is expected to come sooner or later and this new paper would certainly give the regulator a better idea of their usage and a holistic view of these apps.