Telcos fear new guidelines on VAS will hurt business
Value-Added-Services providers are up in arms against regulator TRAI's proposed directives on the procedure for providing VAS to users as the former feel that this could kill the industry and may also cause a revenue loss of Rs 1,500 crore to the government.
"It's not clear why TRAI would back such a move... it would result in a revenue loss of Rs 1,500 crore to the Government. Besides crumbling a Rs 10,000 crore eco-system that employs over 12,000 people," one of the leading VAS providers said.
Telecom Regulatory Authority of India (TRAI) had proposed directives in July to service providers on the procedure for providing VAS to users in a move to protect the interest of consumers.
As per the proposals, the service providers need to obtain confirmation from the consumer through SMS or e-mail or Fax or in writing within 24-hours of activation of the VAS. The service provider should charge the consumer only if the confirmation is received and in case they did not receive any confirmation services should be discontinued.
However, the service provider feels that such directives are not consumer friendly. Mobile subscribers like to have a simple user experience to enjoy their favorite services such as music songs, cricket scores, among others.
According to an industry source, " If this proposal is implemented, it will, in effect deny the customers their right to consume entertainment content they wish to, which will become the reality as a result of the unviable business model.
TRAI's move is seen as restricting the growth of these services because the proposed directive expects the mobile users to send SMS as confirmation of subscription service every month.
The Indian mobile market has less than 45 percent SMS penetration rate and this gets as low as 20 percent in rural areas. The country has a very low literacy rate and the English literacy rate is even lower at 15 percent and such directive does not take into consideration any of these ground realities.
"Such a move, if implemented, will impact the mobile content industry adversely. As content partners, we invest to constantly bring sports, entertainment and other utility services to the mobile consumers while on the move, enriching their lives," said Jatin Ahluwalia, the founder of vRock Mobile, a startup in the inmobile VAS space.
Last year, TRAI had floated a paper seeking comments from telecom operators on measures for protecting consumers’ interest and redressal of customer grievances.
The consultation paper aimed to strengthen the regulatory framework and provide adequate protection to telecom consumers.