VAS revenue and active subscribers become new focus of Indian telecom rows

The Indian regulator TRAI has announced that it will publish a consultation paper that focuses on the country’s VAS market which it hopes will “see how to bring VAS into the active mainstream."

The regulator’s interest in the VAS sector has likely been spurred by continued disagreements between VAS providers and mobile operators concerning the revenue received from VAS. Providers claim that the absence of specific regulations for VAS allows them to be short-changed by operators.

TRAI has investigated the VAS sector before; in 2009, it published its suggestions for growth, claiming that “the telecom access service providers need to provide fair access to their telecom infrastructure to independent content providers and maintain transparency in their management information system relating to value added services for reconciliation.”

TRAI also seemed to absolve itself from making regulatory decisions regarding revenue sharing, stating “mutual commercial agreements between telecom access service providers and content providers/ content aggregators for revenue share in the provisioning of value added services remains the model.”

The regulator has been at the centre of recent controversy over the subscriber numbers recorded by India’s operators. There has been some dispute over the way that ‘active’ subscribers are defined, with TRAI basing its assessment on mobiles used in the visitor location register (VLR). The results of this method showed that, of the overall subscriber totals, 70% of customers were active.

Operators with a higher percentage of active subscribers have reportedly levelled criticism at ‘dual technology’ companies with fewer active customers, with Bharti Airtel (89% active) and Idea (88%) slamming the comparatively lower active user bases of Tata Teleservices (45%) and Reliance Communications (67%).

Tata has issued a response that its active user count is inaccurate due to discrepancies between the methods used by operators to collect their data, stating that it will use the same techniques as rival operators in the future.

The issue of active subscribers is significant as operators are currently claiming higher subscriber numbers as justification for being allocated more spectrum frequencies – obviously, this argument does not hold water if a high percentage of subscribers is inactive.

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