India needs a Mobile VAS Operator (Light) Licence

Yesterday, I wrote about how the Mobile Value-Added Services industry is evolving. I ended by stating that the industry needs a VAS licencing regime. While I completely recognise that licencing is not desirable in general, the peculiarities on the mobile industry and what is happening are creating the need for one.

I speak from our own experience in running the MyToday (opt-in) SMS channels and our mobile Internet portals ( and  On more than a few occasions, we have been blocked by different mobile operators in India. I am sure they had their reasons, but the block leaves us with few options to pursue. When we go to the regulator (TRAI), we are told that VAS is not really under their purview and we need to go to the operator to resolve it. Dead end. We cannot go to the tribunal (TDSAT) because we are not a telecom operator. The only course left is probably to go to the Courts, but we know how long that process will take.

I think part of the problem is that given the recent issues around DNC and spam (voice and SMS), the Supreme Court has come down heavily on TRAI, which has in turn put pressure on the mobile sperators, who have had to act. And there ends up being some collateral damage. This is where there needs to be change since no one really knows who is the decision-maker.

Once upon a time, when voice was the only service being offered by telecom operators and no VAS was there, nothing needed to be done. If operators played fair and allowed open access (charging for data services), then also no action is needed. But given the grey areas and the arbitrariness in decisions from specific operators (often under the guise of unclear or outdated telecom rules), MVAS companies wanting to provide off-deck services are caught in a bind. This will stunt the growth of the overall industry in the coming future of the mobile becoming a magic lamp in the lives of consumers. The solution is not to limit all data services provisioning to mobile operators, but to create an environment where the falling ARPUs increase as more players offer a wide range of interesting services to consumers and operators benefit from increasing usage.

To make this happen, I think DoT / IT Ministry / TRAI needs to come  out with a light (and optional) VAS licencing regime for off-deck VAS players. Here are five simple principles around which this can be based:

  1. Access: Pre-integrated short code and voice portal number, and open access to WAP portal(s) run by the licensee
  2. Billing Integration with operators: 15% max. revenue share payable to operator for billing access. Operator to make payment to Licensee within 30 days.
  3. Inter-connectivity: Licensee will be granted access pan-India, across all operators.
  4. Resources: Licensee can deploy specific equipment at Operators, subject to commercial agreement. These resources will also be inter-operable across all operators.
  5. Dispute Redressal: Any dispute with operators will be addressed by TDSAT. During dispute redressal/hearing period, service will not be interrupted unless found to be violating Govt. of India norms.

A more detailed discussion can be found in a paper we had submitted to TRAI sometime earlier.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.