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Trai may regulate OTT firms such as WhatsApp, Skype lightly

Telecom regulator Trai may go for a light-touch regulation for over-the-top (OTT) players such as Skype and WhatsApp.

The first open house session is scheduled for today and the recommendations are likely to come out by May.

Telecom Regulatory Authority of India (Trai) is examining the issues surrounding OTT players such as Skype and WhatsApp which have services in direct competition to telecom players. The main point of contention is whether there is a regulatory imbalance between the telecom industry and OTT players.

"There is a need for a light-touch regulation. A final decision will be taken after discussion in the open house. By May, Trai should be able to come out with its views," a senior Trai official told DNA Money on the condition of anonymity.

Telecom players have been demanding a level playing field with the OTT industry, which has eaten into their revenues. With internet penetration on the rise in India, now even cable and DTH industry is feeling the heat of such players including Netflix, Amazon Prime and other video platforms.

But Trai is mainly examining OTT services which are similar to telecom players such as voice calls, messages, etc, although not all OTT services or players are under the radar, the official said.

Video consumption on YouTube, Netflix, etc, has been the main driver for increasing data usage in India, which was triggered by the entry of Reliance Jio in late 2016 with its 4G services.

OTT industry in India is expected to reach $5 billion by 2023 and rural areas will play a big role in OTT consumption. About 48% of India's internet users, around 650 million by 2023, are expected to be from rural areas, as per Boston Consulting Group.

The issues of data protection and data privacy also need to be dealt with while framing the regulations for OTT industry, the official said.

Telecom players need to invest constantly in their networks to maintain the quality of services norms. OTT players are not subject to any levy despite huge traffic flowing through their platforms, which needs to be looked into owing to security and interception issues.

Platforms such as WhatsApp and Facebook have already faced the ire of the government over the spreading of fake news. Separately, the Ministry of IT and Electronics has issued draft guidelines for intermediaries to bring online content under regulation.

A section of the industry is not in the favour of OTT sector being regulated as it will kill innovation and the business model, while some feel there needs to be a light-touch regulation considering the fact that telecom networks are capital intensive with security issues involved as well.

OTT providers are players which offer information and communication technology (ICT) services, but neither operate a network nor lease network capacity from a network operator. Instead, they rely on the global internet and access network speeds.

According to Trai, there are two types of OTT providers. On one hand are OTT communication services (VoIP) providing real-time person to person telecom services using the network infrastructure of the telecom operator competing with them. Then, there are OTT application services such as media services (gaming), trade and commerce services - e-commerce, radio taxi, financial services, cloud services (data hosting and data management platforms or applications) and social media using the network infrastructure of the telecom player but not competing with them.

In November last year, Trai had come out with its consultation paper on OTT players. In the paper, Trai has sought public opinion on whether the same rules should be applied to OTT applications as are applied to telecom operators. This issue has been going on since 2015 when the regulator had issued a paper but did not come out with any recommendations. Subsequently, a fresh paper was.