TRAI lays down ground rules for VAS
29 May 2008
New Delhi: In a move welcomed by value-added services operators, telecom regulatory body TRAI has said that it will lay out regulations for value-added services (VAS) as well.
VAS operators have earlier said that telecom operators do not share revenues with them. They have been demanding that TRAI set up a framework for a revenue sharing mechanism that facilitates transparent sharing with providers, aggregators and owners of the content.
As of now, VAS providers remain unregulated, and are not required to have a license. They typically work as channel partners of the telecom operators, who command a somewhat monopolistic control given their ownership of the network. All services other than voice, including SMS, music, entertainment, mobile commerce, data and GPRS services come under the purview of VAS applications.
In its consultation paper, TRAI said, ''To facilitate the growth of value-added services and appropriate returns on investment to all participants in the provisioning of value-added services and to protect the interest of consumers, there is a need to have a proper licensing regime.''
TRAI's move will also bring VAS providers under a licensing authority. TRAI says that in India, the VAS industry is still developing, and does not have standardised processes, benchmarks, and established code of operations, in addition to the lack of transparency.
The regulator said that regulating the sector will address a host of concerns associated with mobile commerce services, including mobile banking, and payments or money transfers via mobile phones.
TRAI's guidelines will extend to cover VAS content as well. Estimates project 10 – 14 per cent of telecom companies total revenues accruing from value-added services. With more high-end VAS applications in the offing, non-voice revenues are expected to boom beyond a third of operator's total revenues within around five to seven years.
TRAI says there is a need to harmonise the regulatory framework for ushering growth in all the segments of value-added services such as content development, technology platform, content aggregation including copy right protection.
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