OTT challenges have already impacted Indian telecom operators. Idea Cellular in May 2014 said that OTT is one of the main reasons for drop in messaging revenues. TRAI, Indian telecom regulator, is keen to create a platform to exchange the views on key issues related to OTT.
This does not mean that TRAI wants to regulate OTT players, which are targeting to expand their free messaging services to India’s 800 plus mobile subscribers.
Also read: OTT impact reflects in Idea Cellular, Airtel fourth fiscal quarter 2014 revenues
Earlier, Idea Cellular and its rival Bharti Airtel indicated drop in messaging revenue component – primarily due to OTT players — in the first quarter of fiscal of 2014.
Last week, TRAI said it would be organizing a seminar on Regulatory Framework for OTT Services. The aim of the seminar is to provide a platform to exchange the views on key issues related to OTT such as new developments in OTT, impact of OTT on TSPs and their counter measures, legal and regulatory framework for OTT.
TRAI said the seminar on August 5 will have three major sessions 1) New Developments in OTT 2) Impact of OTT on TSPs and their counter measures and 3) Legal and Regulatory framework for OTT.
At present, OTT sector is not regulated in the country. If TRAI decides to regulate OTT vendors, top messaging app companies such as WhatsApp, WeChat and Line will be accountable to TRAI.
Also read: OTT vendor LINE Q2 revenue up 17.5 percent to JPY 21.2 billion
If Indian telecom regulator can bring relief to telecom operators, it will be a big boost for them to improve messaging revenues.
For instance, Bharti Airtel’s messaging and VAS revenue component to mobile service reduced to 5.6 percent in Q4 FY 2014 from 6.1 percent in Q3 FY 2014 and 9.1 percent in Q4 FY 2013.
In the case of Idea Cellular, the non-data (messaging) revenue component to service revenue dropped to 6.4 percent in Q4 FY 2014 from 6.6 percent in Q4 FY 2013 and 8.6 percent in Q4 FY 2013.
Also read: How telecoms can handle OTT challenges
As recommendations to OTT providers, Canalys Senior Analyst Tim Shepherd earlier said that it is important to understand that consumers are not using these services solely as a free-to-send alternative to SMS and MMS.
Some of the messaging apps are really doing well in the global telecom markets. In the US wireless market, picture-messaging app Snapchat, as well as WhatsApp, Kik Messenger, BBM and Viber were all among the top 50 free iPhone apps in the Apple App Store in November 2013, while Snapchat, Kik Messenger and WhatsApp made the top 50 free titles in Google Play too.
Collectively, active users of cross-platform social messaging apps already number around 1.5 billion and are set to surpass 2 billion in 2014.
It’s time for Bharti Airtel, Vodafone, Idea Cellular, Reliance Communications, etc. to take note of OTTs. OTTs have already started eating into non-data revenue of some of the Chinese telecoms.
Baburajan K
editor@telecomlead.com
