TRAI issues consultation paper on VAS

This is significant because currently there are no regulations govering the VASPs. And in the wake of of the on-going security issues surrounding the Blackberry services in India, security concerns regarding VAS have come in the forefront.

The regulator has also raised issues regarding licensing obligations towards protection if copy rights including digital rights management, and infringement of other laws.

In its paper, Trai said, "In such cases (the Blackberry case) a licensing and and appropriate regulatory regime will provide clarity and the telecom operator need to source the content for VAS from authorised, licensed or registered content aggregators in India."

At present an operator has to intimate the licensor and Trai at least 15 days before launching the service. However, there is no licensing framework for the content providers or content aggregators who provide VASPs.

Given the advent of the  3G and new generation network (NGN) services in the near future TRAI has invited suggestions stakeholders to respond to the issues raised in this consultation paper by 30 June, 2008.

All services beyond basic voice calls and fax transmissions come under the category of VAS or also called enhanced services, which include ringtones, caller tunes and SMS.
In India the revenue (estimated) from mobile in India the revenue (estimated) from mobile VAS is over 10 to 14 per cent of the total revenue of mobile telecom service providers, while the mobile revenue through such services is expected to cross 30 per cent of the mobile telecom service provider's revenue in the next 5-7 years.

This is primarily led by the declining average revenue per user due to cheaper calling rates in the country. The service providers will hence shift their focus from subscriber base expansion to VAS, as these services have the potential to generate good revenue for the telecom operators and will ultimately benefit telecom consumers.

For the success of VAS in the future Trai has further pointed out that there is need to develop and adopt new technology, bring consolidation in the industry and confidence in the investors particularly foreign investors. VAS which will be provided through NGN, 3G and Broadband Wireless Access will need foreign technology/investment.   Creation of mass market will happen with the content branding, rationalised pricing, transparency and consumer education, said the regulator.

Also with the coming in of new models like the mobile virtual network operator, the telecom operators and VASPs would need to look at the best practices in other countries and design a fair revenue sharing system where the VASPs and content owners do get their due share in a transparent manner.