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“Services should be unbundled,” TRAI chairman says during a discussion on convergence
The wide-ranging discussion during the TRAI Open House saw telecom operators and related internet companies raise issues around the scope of providing a definition to international traffic, competitive SMS charges and more.
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“It would be fair to say that for [the] last 30 years, sir, there was no problem in the definition of international traffic. However, now it seems that a nonexistent issue is being made into a concern by some non-telecom entities to further their own commercial interest,” Rahul Vatts, the chief regulatory officer at Bharti Airtel said during The Telecom Regulatory Authority of India’s open house discussion on August 24, 2023.
Vatts said that to safeguard their commercial interests, some companies were disguising international SMS as national SMS. He said that they have set up servers to send application-to-person (A2P) messages only in a few countries. “And why are they doing so? Because they just want to cut down the cost of their infrastructure. Rightly? So it’s a business but they are also able to safeguard themselves from in-country compliances,” he added.
The context behind the open house discussion:
This discussion was based on a consultation paper that the authority had released in May this year where it explored the need for a separate definition of international traffic. This definition is important because currently, only domestic SMS termination charges in India are under regulation. This means that telecom companies are free to decide how much they charge international SMS termination.
To define or not to define:
Truecaller asks for a definition: “We’ve been being charged almost 15 times more than the domestic rates even though our SMS routes do not leave the Indian geography at all. But just because of the fact that we are headquartered in Sweden, the vagueness in the current definitions is being misused,” Pragya Mishra, the Director of Public Affairs at Truecaller said explaining that the lack of definition of international traffic had resulted in the company being charged more.
Article continues below ⬇, you might also want to read:
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Vodafone Idea says a new definition will lead to ambiguity: “If at all there’s any clarification, anything broader sir, in our view makes it more subjective and people use that opportunity to create their own interpretation[s] that are detrimental to India from a security and also from revenue point of view,” P Balaji, Vodafone Idea’s Chief Regulatory and Corporate Officer said.
He said that to define what is and isn’t an international SMS, the focus has to be on where the message is originating. “As long as that is outside India as an originating SMS then I think it is in our mind an international SMS and it should be only brought into India through people who have the ILD authorization issued by the government,” he explained.
International businesses have to pay more SMS charges in other countries:
“A lot of these operators who today or entities who have made these submissions are happy to pay charges ranging from Rs. 8 to Rs.21 in geographies surrounding India, Bangladesh, Myanmar, [and] Pakistan they are happy to pay charges out there but they are unhappy to pay charges in our country where the volumes are also higher for them,” Vatts said. He added that “the brain and intelligence which sits outside India and cannot be in any way considered as a domestic traffic,” even if the traffic is delivered via Indian message aggregators. (Quick context: Message aggregators help companies deliver messages to their customers. They tend to have direct connections with all global networks)
It is worth noting that Airtel, in its submission to the TRAI’s consultation paper, had argued that the authority should, “capture all messages terminating in India via telemarketers or aggregators and not via ILDOs [international long distance operators].” It had suggested that TRAI declare such messages illegal and in violation of Indian regulations. Vatts built on this point and explained that the sending of messages through aggregators was prospering because of spam. “They [ international companies and aggregators] should be charged proportionately so the higher costs are put as a detriment to control the spam,” he said.
Ravi Gandhi, Chief of Public Policy at Reliance Retail added to Vatts’s argument saying that “in US termination charges over $0.04. EU termination charges around $0.07, The Middle East would be over $0.12.” He agreed with Vatts that the issue emerging here was that of the commercial interests of telecom companies and said, “the only surviving issue is only the charges where we believe that it should continue under forbearance because we cannot control the charges on the other side of the fence.” Explaining that since Indian companies have to pay charges in other countries, Indian telecom companies charging international businesses shouldn’t be an issue either.
Unregulated international traffic leads to forex loss:
“If forex loss for a country is to be prevented, such SMS need to be forced to follow the legitimate route,” Vatts said. He explained that if international companies are allowed to send messages at the same cost as domestic companies, it could lead to a foreign exchange loss of
more than $400- 500 million. Gandhi agreed saying that, “Indian consumers get benefited when this [forex] revenue comes to the telecom operator because that is ultimately passed on to the Indian consumer by the way of their tariff and their charges.”
Note: Story was updated on August 25, 2023, at 4:35 PM to correct a factual error in the copy.
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