The Telecom Regulatory Authority of India’s (TRAI) recent recommendation on the definition of international traffic, comes as a setback for global companies like Amazon, Uber, Google, Meta, WhatsApp, among others, as they will have to shell out a higher amount to telcos for sending SMSes to their consumers.
As per the definition proposed by TRAI for international traffic, any one-time passwords (OTPs) or other transactional or promotional messages sent by these players to the consumers in India would be treated as international SMSes and charged at international tariffs and not domestic tariffs set by telcos.
Though these firms have operations in India, telcos charge them international long distance SMS rates because their servers located abroad are used to generate messages to consumers in India.
Further, TRAI did not consider requests from big tech companies to regulate the international SMS tariff charged by telcos, which is over thirty times higher than the domestic tariffs of around 13 paise per SMS. In the last few years, telcos have significantly increased the international SMS tariffs.
The global companies are now expected to take up the matter with the department of telecommunications (DoT), as the TRAI’s recommendations need to be accepted by it. If the DoT wants it can make amendments to it.
“TRAI has endorsed telcos’ earlier definition with new verbiage. The definition is very open-ended which will continue to give flexibility to telcos to adopt a wider interpretation in their favour,” an executive of a global company said.
“The TRAI’s recommendations are not at all favourable to Amazon or other big tech companies. They will continue to be at the mercy of telcos as far charges are concerned, and will have to prove that their SMS is domestic,” the executive added.
In its recommendations, TRAI accepted telcos’ arguments that international SMS are usually camouflaged or mirrored as a domestic SMS through technology intervention by global companies.
Simply put, the argument is that the servers of such companies are located outside India and they trigger A2P (application to person) SMS such as OTPs, KYC-related or promotional messages. Such A2P SMSes are routed to India through Internet/ leased lines, which enters into Indian PSTN (public switched telecom network) using their media gateways/mediation servers located in India.
Such global companies take services of telemarketers in India who use the DLT (distributed ledger technology) to transmit messages to end consumers and that bypasses the international long distance (ILD) route, according to telcos. They call such SMS traffic as grey traffic.
Therefore, in its recommendations TRAI said that to avoid such mirroring, if an A2P message involves any part of its process — creation, transmission, or reception — using a computer system or software outside India, then the message should be treated as an international SMS.
On the other hand, global companies have argued that owing to advancement of technology, messages originating from applications and sent to the end customers do not require involvement of a telecom network. Then why should such companies pay international SMS tariffs to telecom operators when there is no interaction with telecom networks while sending SMSes.
“TRAI’s proposed definition wherein it included applications or softwares for sending international SMS is myopic. This is because no interaction with telecom networks is happening during the process of origination of messages,” another executive said, adding that TRAI must consider regulating the tariffs for international SMS and remove it from the scope of forbearance just like it did for domestic SMS tariffs.
A crucial factor which contributes to the added rates for international SMSes is the forbearance on termination charges, meaning telecom companies can charge each other any rate when a message sent by a foreign entity terminates on their networks. For domestic transactional messages, TRAI has specified the termination charge of 5 paise. Overall the domestic SMS charge comes around 9-15 paise for commercial entities. Financial Express
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