Hear this more and more: Data, digital & content to be telecom’s new voice

Voice as a data packet may seem as difficult to digest as sweet lime might have seemed once. But then the world has afforded stranger beings. And we are talking technology where the leap of faith knows few obstacles. In the wake of India’s swift march to a 4G world, a lot of regulatory and policy edifices are set to fall by the way side.

The beauty of 4G technology allows voice to be carried as data which occupies little bandwidth, thus also easing the constant thirst for spectrum — a big cry of telecom operators in the past. In the app-ruled world, experts feel that old tariff structures built around interconnect user charges need to give away.

Speaking at a panel discussion moderated by CNBC-TV18 Managing Editor Shereen Bhan, Bharat Sanchar Nigam’s former Chairman and Managing Director R K Upadhyay said voice revenue was withering away and its place was being taken over by digital content and over-the-top applications.

“Today, you see, yes, it was mentioned that for some of the operators even today, the main revenue stream is voice, that is true. But that revenue stream is already being taken away. Even with the current situation of IUC, more and more OTT services, they are taking away the voice revenue as well,” he said.

“Many people are using Session Initiation Protocol (SIP), they are using virtual private network (VPN), also some of the OTT applications, I do not want to name them, but they are there in place. So even the voice revenue is getting away IUC being there or not being there. So therefore, this debate should, in my opinion finish as soon as possible and there will be less and less regulation, OTT services where they just cannot be regulated, it has been seen. Attempts have been made, but they have been unsuccessful. So IUC regime regulation for OTT services, there cannot be any,” he said.

Upadhyay said reducing the interconnect user charges to zero will hasten the pace to an all-IP (internet protocol) network that 4G technology rests on.

“Reducing IUC or making it zero will fasten the process up converting the network to all IP network which is reality. Digital services, yes they are in offing in India, but they would soon take over and the telecom revenue would not be pure telecom revenue, it will be revenue from telecom plus digital services. That is given,” he said.

Expressing the same view was Bharti Airtel’s former Chief Executive Officer Sanjay Kapoor and Upadhyay’s former colleague from the state sector, RSP Sinha, the former CMD of Mahanagar Telephone Nigam (MTNL).

“Eventually, IUC will die down. It is a matter of time, I do not know what point in time because packets will completely take over and even voice will be an application like every other application or digital service available in the market. So that progression has to happen. In the interim, this struggle and push and pull will happen till we reach that equilibrium where it is all about data and digital services, all about packets and digital services,” Kapoor said.

Both Upadhyay and Sinha batted for immediate scrapping of IUC -- a subject that the telecom regulator is expected to overhaul in less than two weeks.

Sinha recalled that some incumbent operators, who are now demanding a higher IUC, had 14 years ago fought for its lowering. He said regulations needed to be in line with the technological advances happening around.

“I am talking about 2003 when interconnect usage charge was at the peak, Rs 0.50 per minute, when the calling party pays regime was introduced and suddenly we found that it was reduced to Rs 0.30 within one year. We were protesting because it was hurting us,” Sinha said. The IUC today stands at 14 paise per minute.

Sanjay Kapoor, former Chief Executive Officer of Bhati Airtel, too said the writing was on the wall and the government needed to create a framework where 3-4 players survived and prospered in the market.

“. . .eventually the debate in this industry will move based on how much of packets you sell and how much of digital services you sell. When you get down to USA, when you get down to Japan, when you get down to Korea, their main revenue streams today are divided between the packets and between the digital services,” Kapoor said, echoing the sentiment of his colleagues from the public sector companies.

Kapoor had a word of caution. He said the revenue from data wouldn’t grow once everyone had it since the consumer won’t pay extra for consuming more data.

A Digital India would love that to happen.