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Airtel now charging more for VoIP calls; are there broader repercussions?

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In a move that will result in Airtel’s customers’ year-end Skype or Viber holiday calls costing significantly more, the mobile telecom company has quietly introduced a change in their tariff plan’s terms and conditions page that introduces differential pricing for VoIP calls. The page states:

All Internet/data packs or plans (through which customer can avail discounted rate) shall only be valid for internet browsing and will exclude VoIP (Both incoming/ Outgoing).
VoIP over data connectivity would be charged at standard data rates of 4p / 10KB (3G service) and 10p / 10KB (2G service).

Airtel’s regular data charges are 0.25 paise per 10KB, but when running VoIP apps, data usage would now be billed at 4p per 10KB (on 3G) and 10p/10KB (on 2G). This effectively makes the process of using services like Skype, Viber, Facebook Messenger voice calling and other similar services far more expensive on their network--that’s 16x more expensive on 3G and 40x over 2G.

So how expensive is expensive? Let’s deconstruct: Skype uses between 24-128kbps of recommended bandwidth for a regular voice call. Assuming an average bandwidth usage of 76Kbps, a 5-minute Skype call would consume approximately 2.78MB of data. Going by their regular data plan, this call would cost about 70p on Airtel’s mobile Internet. With the new plan, it jumps to Rs 11.20 on 3G and Rs 28 on 2G: a potentially massive increase for users who are wont to make regular web calls over the phone.

This may have been a pre-emptive move, triggered by WhatsApp’s rumoured entry into the VoIP space-an event that could have huge repercussions given the growing reach and scale of the popular messaging service. When approached, Airtel released a statement saying, “We have made some revisions in the composition of our data packs, and will offer VoIP connectivity through an independent pack that will be launched shortly. Our customers can continue enjoying voice calls over data connectivity by opting for this VoIP pack, or simply use VoIP services on pay-as-you-go basis."

Unfortunately, the pay-as-you-go basis happens to come at a pay-through-your-nose price point.

This issue falls squarely within the Net Neutrality debate that has been doing to the rounds over the last several years. Net Neutrality implies treating all kinds of data on the Internet equally, without any preferential treatment given to a particular type of application, website, platform, equipment or mode of communication. In this VoIP case, it implies an Internet Service Provider (ISP) delivering for all users the same speed and cost of access to a website or service, with no special plans that force a user to pay more for that particular service. Which is what is happening here.

Services such as WhatsApp, Skype, Viber, Google Hangouts and even Facebook are referred to as Over the Top (OTT) services and, owing to their ever-growing popularity, ISPs (including your cellular operators and home broadband service provider) have increasingly been contending with significant losses in revenues. This is simply because many of these web services have replaced--or offered cheaper alternatives--to existing services that happened to have been revenue sources to them: WhatsApp has all but replaced SMS and VoIP calls are now regular alternatives to STD and ISD calls. While service providers are mulling strategies to counter this trend, this is the first time an Indian Internet operator has actually gone ahead and introduced a differential pricing plan that prevents them from losing money from a popular web service.

As the Indian mobile landscape rapidly heads toward massive upheavals with the introduction of 4G services and increasingly affordable mobile 4G handsets in 2015, we can expect a price war on all fronts, with providers and manufacturers competing for customers’ business. While these players dig out every strategy to corner off a market for themselves, it is important for consumers to be especially mindful of offerings that restrain the Internet experience: special (time-limited) trials for unlimited usage of web services (Facebook, YouTube, Gmail), telco-operated portals that offer access to specific web apps, and practices that limit usage of services with increased costs or reduced access speed.

The government has stated that they are looking into this Airtel issue; Telecom minister Ravi Shankar Prasad says, “We will look into it. Government will come back with a structured response.” But until such time the regulatory authorities weigh in definitively on this issue--and it is bound to take a while--it would be prudent to use bandwidth-heavy web apps (Skype, YouTube et al) over a WiFi connection where possible, and to go through that fine print in your Internet provider’s service contract to prevent yourself from being slapped by a big fat bill.

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