Whatsapp's VoIP services may shrink telcos' revenue

Internet telephony can only be provided by an Internet Service Provider or Unified Access licence holder, believes the Cellular Operators Association of India (COAI).

"Companies offering OTT (Over the Top) voice services, without holding a telecom licence in India, would essentially violate and circumvent Indian telecom licencing provisions and provide services that are otherwise only permitted under a telecom licence," wrote Rajan Mathews, Director General of COAI, in a letter to the Telecom Regulatory Authority of India (Trai). OTT refers to video, television and other services provided over the Internet.

Telecom operators are concerned that Whatsapp, which has close to 70 million users in India, would soon start offering voice-over-Internet-protocol (VoIP) calls. This would allow a Whatsapp user to make a call to another Whatsapp user for free using a WiFi or a cellular data service. Customers till now have used VoIP to talk to their relatives and friends living and travelling abroad.

The telecom operators have not bothered until now, because international calls are a very small portion of their overall revenue. Once the service is available to millions and starts getting used locally, the situation will be different.

Voice revenue is the mainstay of Indian operators. "VoIP will lead to decline in voice revenue. It has already adversely affected the SMS revenue in India," says Neha Gupta, senior analyst at research firm Gartner Similar problems have surfaced in the past for telecom operators in other parts of the world. The matter was resolved by imposing rules and finding solutions that are mutually beneficial to both operators and OTT players.

In Germany, the regulator tracks the usage pattern of the top few communication apps and regulates them. In France, the government banned Skype and only allowed it to resume operations after the service was brought under regulation. South Korea charges a small fee for the services.

Trai is working on a consultation paper which will address problems of both parties - the operators and the OTT players. Revenue sharing is a way of achieving this.

"Thirty per cent of all OTTs around the world have some kind of revenue sharing model, but that does not exist in India. Where the revenue is shared the situation is much better," says a Trai official on condition of anonymity.

Telecom operators will have to explore other options as well - just like they devised special packs exclusively for Whatsapp messaging and Facebook about a year ago. It not only increased the usage of these OTT services, but also helped operators grow their data revenue.