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Net Neutrality: WhatsAppening to the voice business of telecoms?

But data networks currently do not support uninterrupted voice communication.

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We can now make calls through WhatsApp. Why is this important? Though Viber and other apps have been offering the same service, the popularity of WhatsApp in India will give a fillip to the adoption of Internet-based calling or VoIP. This has come at a time when the ‘most-commented on’ debate on Net Neutrality is happening across the country, ironically I would reckon, using mobile data networks.

Net Neutrality supporters, which also includes Rahul Gandhi now, demand clean networks with no speed throttling and expect mobile networks not to take sides with any application, both general and instant messaging. At a time when operators are going to great lengths to prove to their disbelieving subscribers that they are favouring none, they will have to let go of a good upcoming opportunity for making tailor-made plans for calls on such apps. It will not break the Net Neutrality rule, as there are WhatsApp plans, popularised initially by BlackBerry Messenger. As the usage of WhatsApp might now increase, it calls for very fair rate revision, which unfortunately cannot be done. Not now.

Airtel, the largest telecom operator has come under the hammer the most. The group which is also the promoter of messaging app Hike, is now going to great lengths to support Net Neutrality. It has increased its communication with its subscribers, in a bid to not become an Internet villain.

Telecoms who were earlier busy with spectrum and government have, for a good reason, shifted focus to subscribers. But, is their bread and butter business of voice calling vanishing fast? If VoIP is a reality, operators have a lot more time. Voice business and its revenues will last for another licence renewal cycle.

Industry leaders think so too. Two years back, Idea Cellular’s MD, Himanshu Kapania said that there is a lot of juice left in the voice business. He stands by his statement even now. Idea, which has been chasing new subscribers in smaller towns, had a lot of confidence on new users coming into the market. Kapania now says that around 300 million fresh subscribers will come under the telecom net, in the next four to five years.

Subscriber addition numbers add up as well. Around eight million subscribers were added in February 2015, according to telecom regulator TRAI. All of them need not be smartphone users, as they contribute only 35 percent of the new handsets purchased. This leaves 65 percent feature phone users, who make up as much as 41.8 million handsets purchased per quarter (according to IDC), untouched by data use.  

Smartphones are growing rapidly, but there is a huge section of population which is still living on feature phones and the basic application - voice. They are the ‘red button-green button’ users, who use phones exclusively for making and receiving calls. Instant messaging services have very quickly eaten up into SMS revenues. That however is a bad example to use while calculating the impact of data on calls.

Data networks currently do not support uninterrupted voice communication. Small patches in networks support instant messaging, but voice requires a much higher quality of seamless communication. There might be a hue and cry over disruption of the voice business by the industry. It is partly true more because of the existence of licensing for the service offering.

As a licensor to a particular service, a telecom operator has every right to question the regulator over the loopholes in the licences they charge money for. VoIP breaches their licences which say that only a certain number of bonafide players can offer a certain service, which is more or less a promise that only a certain amount of players hold them and hence the number of operators is controlled. The emergence of VoIP hurts telecom players in two ways. One is the loss of business and another is the addition to competition. It weakens a telecom operator’s ability to price its voice offerings.

TRAI however cannot regulate and control over-the-top (OTT) players either, due to practical problems. What they can simply do, is incorporate the existence of such players and their independence to provide VoIP in their licences to stay legally safe. That, I guess would take as many years as it would take for the evolution of good quality voice-over-data. It’s there in the future, but not too close. Data is years away from finding its calling.  

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