'DoT Panel Report on Net Neutrality Protects Telecom Operator Revenues'

With a DoT panel siding to protect telecom firms' domestic call revenues, over-the-top players like WhatsApp will have to tweak their business models by introducing paid calling services over the Internet, says credit rating firm Ind Ra.

"OTT players will have to roll out separate packages for VoIP (voice over Internet protocol) services which shall eventually be charged to the subscribers," India Ratings and Research said in a note on Friday.

"Players such as WhatsApp, WeChat, and Hike shall have to tweak their business models by differentiating between the messaging and VoIP product offerings," it added.

Last month, the official panel on net neutrality had proposed regulation of domestic calls on Internet-based apps like Skype, WhatsApp and Viber by putting them on par with services offered by telecom operators.

"The DoT committee's recommendation of regulating only the domestic calls of voice over Internet protocol (VoIP) service providers is aimed at protecting voice revenues of telecom service providers (TSPs)," Ind-Ra said.

Conventional voice calls get a revenue of Rs. 0.25 per minute for the telcos as against the Rs. 0.06 paise per minute, it said, stressing that the messaging services offered by OTTs have already dented SMS revenues for the companies.

It said that voice services still command 50 percent of revenues for telcos, even though there has been a decline in average revenue per user on voice recently.

The ARPU (Average Revenue Per User) for voice dipped to Rs 68.3 per month in December 2014 from the Rs 71.7 per month in July same year, it said.

One of the reasons for the comparatively slower pick-up on the VoIP calls has been the bandwidth issues, but the impending launch of the high-speed 4G services may pose a threat and more consumers may prefer to switch to VoIP, the agency said.

The recommendations of the Department of Telecom's Committee, set up after the debate on net neutrality flared up in India, came in for criticism from various industry bodies.

IT services industry lobby Nasscom said regulating domestic Internet calls alone will lead to breach of privacy and it will be tough to monitor compliance.

The DoT committee, however, favoured no regulation for international VoIP calls.

Telecom Minister Ravi Shankar Prasad has said meanwhile that although the panel was set up by him, it's recommendation do not represent view of the government. The report is in public domain for comments till August 15.

The government will firm up its views after considering public views and recommendation of telecom regulator Trai.