In May 2007, TRAI asked for suggestions from industry players on Value Added Services/Regulatory Issues and Google’s reply actually nailed down some of the finer issues that needs to be addressed/discussed (important points have been highlighted).
Few snippets from Google’s recommendation to TRAI (though it’s dated May 2008, but is still very relevant)
On VAS vs VASP :
..Today, third-party Value Added Service Providers (VASPs) play a significant role in the functioning of the mobile VAS ecosystem. Google’s view is that this role is sure to become even more strategic and central in the years to come.
As the development of the global Internet has demonstrated, entrepreneurs at the “edge” of the network – and not network access providers themselves – have developed the most ground-breaking technologies and have been the primary source of innovation that has changed the world.
The same is true for mobile VAS worldwide and in India. While operators do play an indispensable role in enabling and developing “non-core” VAS services, it is the countless VASPs that will become the focal point of mobile VAS innovation in India.
The above two statements are not meant to diminish the pioneering role of operators in the development of mobile VAS; instead, the points are meant to acknowledge the likely scenario that VASPs – small in size but large in number – will be the real drivers of innovation in mobile VAS.
It is with this balanced frame of mind, one which appreciates the role of the two most important stakeholders – operators and VASPs – that TRAI should continue to recommend public policy.
To be sure, with the ongoing convergence of the Internet and mobile phone, Google envisions the continued rapid growth of the mobile VAS industry.
The company, in particular, envisions an ecosystem marked by stakeholders that value openness, transparency, and interoperability. Smaller companies will drive innovation, SMS will be universal, WAP services and Internet browsing from the mobile device will become increasingly “core,” and social networking will remain a priority for Indian users.
Finally, Google anticipates a mobile VAS industry that is more squarely focused on developing services for rural users – an important constituency that requires thoughtful service and attention.
Definition of VAS?
The inclusion of GPRS as a value-added service does not, for instance, represent ground-level realities of what might constitute “core” and “value-added” services.
As more and more services become “core” and default to the mobile phone – especially as India moves from 2G to 3G – the notion of what is “Value Added” should shift accordingly.
Value Added Service Provider [VASP]
Google would caution against the development of a formal, separate licensing regime for third-party VASPs. Already, the number of VASP companies in India is reaching 1,000 and – within years – it is expected that the number will be virtually countless. This is and should remain a welcome development as VASPs are, by their nature, meant to be small, nimble, and entrepreneurial – the hallmark of a technology innovator. It may not be possible to bring even 20 percent of these companies under a licensing regime.
The creation of a separate licensing regime for mobile VASPs would be analogous to doing the same for the innumerable companies providing innovative Internet-based services.
Recommendation on VASP:
the objective of any formal public policy towards VASPs should be to define, recognize, organize, and sanction the role of VASPs.
To that end, TRAI might consider initiating a National VASP Recognition system for VASP companies. Under the rubric of this system, the government may also formally define mobile VASP and issue public policy “directives” to guide relations between VASPs and the various other stakeholders in the mobile VAS ecosystem. VASPs might be required to renew their registration on a timely basis.
In the paper, TRAI expresses its well-intentioned hope that “for security reasons it would be appropriate that the value added services provisioning platforms or servers are located within India.”
First and foremost, Google expresses its unequivocal commitment to security in India and belief that security should be the government’s paramount concern in its oversight of any industry, including mobile VAS
Google believes that TRAI’s articulated hope for servers in India does not fully appreciate the reality of global network architecture and global organization structure.
For many global organizations, it is significantly more efficient and cost-effective to centralize services in larger data centers rather than creating data centers in each country of operation. Moreover, for many VASP companies, which as stated earlier tend to me small without an array of resources at their disposal, this would be a difficult proposition to guarantee.
Instead of presupposing that the only way to meet security objectives is for VASPs to locate servers in India, Google encourages TRAI to remain open to other ideas and initiate a dialogue with the VASP industry on this topic where specific ideas can be discussed.
Safe Harbour for Operators and VASPs ?
Analogous to trends visible on the Internet, mobile VAS are themselves increasingly centering on “user-generated content.” While such services of course present unique challenges, they also present unprecedented opportunities for users to create, express, connect, and educate like never before. Given the inordinate amount of data being carried on mobile networks, it would be nearly impossible for any stakeholder to proactively edit content before it is transmitted.
VASPs, instead, play the important and sensible role of a neutral technology platform, with an obligation to follow lawful procedure when made aware of illegal activity. Such a “safe harbour” – in line with international best practices – could articulate that operators and VASPs should be presumed immune from liability for unlawful activity taking place via their services unless it is demonstrated that they actively conspired, abetted, or had knowledge of the act. Put more simply, mobile VASPs should be presumed innocent unless proven guilty. Articulating this latter point would go a long way towards assuaging VASP fears that they may – without any criminal intention on their part – be held liable for the criminal activity of others.
In an industry dominated by small players without significant resources, it is especially important for TRAI to articulate the hope for such a “safe harbour”; to be sure, such a position would encourage participation of mobile VASPs while the lack of such a “safe harbour” would discourage entrepreneurship and innovation.
As TRAI is well aware, VASPs must currently reach out to individual telecommunications operators and inquire, one-by-one, regarding the availability of a set of numbers.
In each case, individual operators must accept and allocate the chosen number to the VASP. Moreover, some operators also ask VASPs to pay a fee to obtain preferred short codes; matters are made even more difficult given that no set timeline exists in which operators are bound to approve or reject requests from VASPs for short codes.
While there are many ways in which this public policy objective may be met, one option might be to create an online system via which entrepreneurs and innovators can submit a request for available shortcodes, enter relevant contracts, and pay appropriate fees across all operators
Google seeks to remind TRAI that, as currently organized in today’s licensing regime, it is the exclusive privilege of the operator to decide what consumers can and cannot access.
Another guideline for the government’s consideration might be the articulation of a positive list of criterion which, upon being met, a VASP cannot be denied carriage by an operator; this would be a welcome development in light of the current negative approach taken by operators.
For instance, TRAI might affirmatively state that operators, who should of course be able to charge VASPs for access to their networks, should not be able to charge VASPs based on the actual nature of the content or service being provided. Yet another approach might be for the government to encourage more transparency regarding the “Quality of Service” (QoS) of VAS on mobile networks. Google believes that such transparency – analogous to what is presently available regarding the transmission of voice data – would shed needed light on the current “Walled Garden” which disrupts the availability of some VAS and overall QoS.
Analogous to the point made earlier in the paper regarding billing, operators should consider allowing VASPs to specify charges to end users in terms of mobile minutes
..the transfer of mobile minutes between carriers should be allowed. Implementation of the latter point would allow peer-to-peer and micropayments to flourish and is in line with the important principles of openness and accessibility. A user with one operator should have the ability to pay a user with another operator by transferring mobile minute credits.
Finally, Google would encourage TRAI to work towards a day when mobile currency can be converted to physical currency. TRAI should work towards the creation of a policy environment in which mobile wallets can be created and the stringent “Know Your Customer” (KYC) requirements of the Reserve Bank of India (RBI) are removed.
The approaches to mobile payments outlined above are merely some of the many ways in which mobile commerce in India – particularly in rural India – can reach its full potential.
While paper has quotes from other organizations (Tata/IIM A/Bharti etc), but Google’s response speaks of their vision and candidness and talks of real challenges which TRAI (via) should deal with (download the pdf.) – it also speaks of Google’s ambition to be the next driver of telecom growth.
What’s your opinion?