TRAI Reduces Scope Of Regulation For OTT Apps Amid Operators Feedback

Along the sidelines of Digital India, with the increasing internet and smartphone penetration for end-users, Indian government-owned statutory body Telecom Regulatory Authority of India (TRAI) has reduced the scope of regulation for the proposed framework for the over-the-top applications (OTT) like WhatsApp, Skype, Netflix, Hotstar among others.

Earlier in January 2018, reports surfaced that some telecom operators had filed a complaint on regulatory imbalance against these OTT platforms. TRAI had received a request that certain OTT broadcasters have been streaming videos which are chargeable on DTH and cable networks thus posing a threat to the latter.

TRAI had also floated a consultation paper in 2015, on whether the OTT players that offer voice, messaging and video call services through applications should be included under the licensing regime and whether the over-the-top growth was affecting the traditional revenue stream of operators, among other issues

However, the telecom operators have now witnessed high data consumption on their networks due to the increasing use of such OTT applications.

“We have reduced the scope of that paper. We have already issued recommendations on net neutrality and previously on differential pricing. Now, very few issues are left with respect to OTT. We have to look at regulatory imbalance (with respect to telecom operators). But telecom operators themselves are saying that OTTs are helping data consumption,” senior TRAI official told the media.

Notably, with the introduction of features and applications like WhatsApp Voice call, WhatsApp Video call, Google Duo, Skype, as well as increasing adoption of video streaming services such as Amazon Prime, Netflix among others, there has been observed a surge in the data usage.

According to a report by PriceWaterHouseCoopers, India provides a huge opportunity for online video content players. Apart from the traditional over-the-top (OTT) players in the market, major broadcasters in the country have also invested in this segment and launched their own OTT platforms.

The market is at present dominated by global players such as Netflix and Amazon Prime Video, broadcaster-owned platforms Hotstar and Voot, and SonyLIV. There are also some independent video-on-demand service providers like YuppTV, Hooq and Spuul.

According to PWC, the main problem in the OTT market in India is the average price for cable and satellite subscriptions, which limits subscription revenues for the OTT players. As stated by a March 2018 FICCI-EY report,  about 250 Mn people viewed videos online during 2017 in India. The report also predicts that the figure is expected to double to 500 Mn by 2020.

Further, in order to compete with the major players, US-based Netfilx is also considering tweaking its premium strategy. Recently the top players in this sector such as Netflix, Amazon, and Hotstar  allegedly held a meeting which was coordinated by the Observer Research Foundation (ORF) in order to regulate their content in India.

The major concerns of these VOD companies were regarding the regulatory uncertainty, unpredictable censorship and court rulings that could impact their long-term business potential in the country.

[The development was reported by LiveMint]