Airtel expects TRAI to protect telcos sales amid OTT onslaught

Bharti Airtel expects telecom regulator TRAI to suggest a framework under which mobile operators are not "disadvantaged" in terms of their voice call earnings against emerging competition from free Internet-based calling service applications like Skype and Viber.

"We believe there should be some kind of framework where we are not disadvantaged in terms of our core source of revenue and that is the context in which consultation will hopefully take place," Airtel said at an earnings call today.

India's biggest telecom firm in December came up with a scheme to charge separately for Internet-based voice calls provided by mobile applications like Skype, Viber and Line called over-the-top (OTT) players. Based on the scheme, usage of each GB of data for VoIP on 3G network would have amounted to about Rs 4,000 and Rs 10,000 on 2G network.

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Amid huge public outcry on the social media against these proposed charges, the company dropped the plan. With mobile operators getting wary about messaging apps eating into their voice call earnings, Kavin Mittal, son of telecom czar Sunil Mittal, recently said that such services in fact can open a new 'fat revenue stream' for the full-fledged telecom firms.

Kavin runs Hike Messenger, a joint venture between Bharti Enterprises and Japan's Softbank Corp. "The contribution of VoIP (in company's revenue) at this point of time is very very tiny so it not really material as we look at it.

There is arbitrage between voice pricing and data pricing. As an operator we are expected to roll out network, incur capex-opex," Bharti Airtel said. Riding on demand of mobile internet, Airtel on Wednesday posted over two-fold jump in its consolidated net profit at Rs 1,436.50 crore for the three months ended December 2014.

Consolidated mobile data revenues increased by about 62 per cent at Rs 2,872 on yearly basis on higher data usage. Mobile data revenues now contribute more than 85 per cent of the incremental revenues of Airtel. While stating that innovation in the internet space has resulted in growth of mobile internet business, the company added that the consultation paper from TRAI is expected to discuss various issues around OTT players business like security and legal interception of services.

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"The reality is that there is a bunch of innovation that is happening in the Internet eco-system and that is why we are in business in terms of growth of mobile internet," Bharti Airtel said. The company said it collaborates with the whole gamut of players ranging from the OTT space, device manufacturing segment and other kinds of partners.

"Having said that, we await process of consultation specially on VoIP that TRAI has indicated they will put out which are to do with things like security concerns, issue of lawful intercept and host of other regulatory issues," the company said.

Source: PTI