Telcos mulling ways to work around zero-rating ban

Mobile carriers are considering creative ways to work around the Telecom Regulatory Authority of India's regulation prohibiting discriminatory pricing of data services to hold on to data customers and reduce the impact of the ban.

Some experts believe that companies such as Bharti Airtel and Reliance Jio Infocomm could offer their own apps through intranets at lower cost or even free, defeating the purpose of the new rule.

Potential workarounds being discussed in telco war rooms include creating their own apps / content and hosting them on company server   s, bypassing the internet, or even reviewing data pack volume marketing strategies, a top executive of a leading mobile carrier told The Economic Times.

The immediate trigger for hosting proprietary apps on company servers, he said, stems from a potential loophole in Trai's pricing regulation that exempts tariffs for data services delivered over closed electronic communication networks.

Another top executive at one of India's top three telcos said the very objective of differential data pricing stands negated since operators can effectively "offer anything" as long as it is within a closed ecosystem.

"Custom curating and therefore differential pricing can still happen in the way this policy is written," the second person cited.

Another official in the same company feels the loopholes also open up new avenues to grab customers. "As an operator, this is great, we can have captive content, at a captive cost, as long as it is not available to anyone else. It's a great way to capture customers."

But most mobile operators privately agree that the vast swathes of entry-level data shoppers, who typically, buy 1 GB 3G monthly data packs in the Rs170-250 range to savour Whatsapp/Facebook for free, could be in for rude billing shocks. This is since such freebies would disappear and costs henceforth would be linked to actual data usage, which in turn, could see entry-level data users exhausting their data limits far more rapidly and ending up "paying as much as Rs2,000 for every extra GB consumed".

Little wonder that mobile carriers are exploring ways to tweak data pack volumes to address the needs of entry-level data users.

A possible option being discussed is resizing a mass-market 1 GB data pack, wherein the pack size is shrunk to 600-700 MB during peak hours, and give the user an unlimited option during off-peak hours, post 10 pm onwards.

Amresh Nandan, research director, Gartner, seconds the views. "Telecom service providers may not be happy with Trai's notification, but they have the ability and freedom to create different kinds of internet access packages as long as content is not a parameter to provide or bar access to anyone."

According to Nandan, such practices to create premium products have already started elsewhere "with products such as bandwidth on demand", although such endeavours, he said would require "changes in network and operations".

Former Bharti Airtel (India) CEO Sanjay Kapoor also expects data price arbitraging to continue since the Trai order, according to him, merely "transfers the onus" of using price arbitrage, if any, from the operator to consumer.

"Since bulk of the usage of operators happens around hyper-local strategy, which includes micro-segment based packs with bundled data and voice, there's enough creativity and innovation to ensure such packs continue to exist." The only change, he said, "is that the choice will be with the users, not operators".

Auspi, the lobby body representing CDMA players such as Sistema Shyam Teleservices and dual tech carriers such as Reliance Communications and Tata Teleservices, feels telcos will not be hamstrung by Trai's regulation.

"Trai has not disallowed either packaging of internet access with voice, or of having internet access packs with different prices, as long as the sites being visited are not restricted in any way, so operators will be able work within that envelope," said Ashok Sud, secretary general, Auspi.