They say the best defense is a good offense. Amid the ongoing debate on Net Neutrality, Star India says that telecom operators should start sharing data revenues with Internet services for significantly driving up data consumption. Star India was offering counter comments (pdf) for TRAI’s consultation paper on Net Neutrality and regulating Internet services such as WhatsApp, Viber, Skype.

“Given the fact that numerous OTT services have created a strong consumer proposition for the internet, thereby driving penetration, it is equally likely that TSPs incentivise / compensate OTT services that are responsible for driving up data consumption by sharing a percentage of their data revenues,”

TRAI, in its consultation paper (Pdf), had suggested that telecom operators could generate additional income from end users and the content providers involved, which would be used for network upgradation. Some of the new “business models” suggested for bandwidth-hungry services such as video include prioritization for higher prices, charging applications for prioritization for delay-sensitive (read live streaming) services and providing guaranteed network capacity for end users.

Star, in its counter comments, said that there was no evidence that applications sharing revenue with telecom companies could spark upgradation of networks, rather, the opposite may happen. “However, if revenue is generated by charging content and application providers to reach customers rather than only charging users for data, the incentives for a telecom service provider can potentially change. Telecom operators now gain the incentive to maintain a level scarcity and not upgrade existing infrastructure in order to maximize gatekeeper revenue.”

Telcos aren’t disclosing info on privacy and security

With regards to security, Star India again turned the tables and questioned the disclosures of telecom companies. “Many telecom companies in India have not made information publicly available as to whether and how they comply with regulations that guarantee security, privacy and safety of the customer. The question arises why the internet services and apps should be brought under similar regulations. All app developers have a privacy policy as well as run a support email regarding questions,” Star India mentioned.

Our Take

We think that Star India’s views in this case are fair. Why else would people use data services if not to live stream the IPL on their mobile devices? Star India’s argument can also be supported by an anecdote: Himanshu Kapania, Idea Cellular’s CEO, in a conference call, said that the top applications which are driving consumption of data were video services, followed by social media. Kapania added that there is still no evidence of cannibalization of voice revenues because of services which use VoIP such as Viber, Skype and WhatsApp.