Telecom operators and tech firms find themselves at odds over high SMS tariffs, resulting in one-time passcodes and consumer messages from foreign countries becoming significantly more expensive than their domestic counterparts. This issue has prompted the Telecom Regulatory Authority of India (TRAI) to issue a consultation paper, aiming to gather opinions on whether the meaning of the term ‘international traffic’ requires modification. This key term forms the basis for defining what an international SMS is, and thus, how it should be priced.
Understanding International Traffic
As per TRAI’s consultation paper, ‘international traffic’ is defined as the international long-distance load or data that is transmitted over a telecom network, originating in one country and meant for another. To illustrate, an SMS from India to Bangladesh exemplifies international traffic. It encompasses different forms of communication such as voice calls, SMS, and data transfer crossing national boundaries. An international SMS is a text message that starts in a foreign country and ends in India, or vice versa. This differs from domestic traffic, which pertains to communication within a single country.
India’s Telecommunication Traffic
The telecommunication system in India comprises 22 circles or geographical regions created for efficient administration and regulation of telecommunication services. This ensures effective coverage and management of telecommunication operations across the country. There are three types of traffic: intra-circle traffic, inter-circle traffic, and international traffic. While domestic SMS has regulated termination charges, telecom operators have the liberty to set termination charges for international SMS, making it highly profitable.
The Contention Around Redefining International Traffic
Telecom operators advocate for maintaining current international SMS tariffs. Contrarily, the Broadband India Forum, representing Big Tech companies like Amazon and Google along with Internet Service Providers, argues against strictly defining SMS based on geographic boundaries. They assert that messages sent via Indian gateways should not escape the international SMS termination charge. This group believes that the label of international SMS is unnecessary since messages can be relayed over the internet to an Indian gateway. They are of the opinion that exempting international SMS from this charge will lead to a substantial revenue loss for Indian telecom operators.
On the other hand, tech firms contend that the high prices for international SMS are unjustified by the actual service cost. They claim that expensive international SMS pricing can lead to fraud, putting companies at risk of financial losses. Twitter claims that telecom operators globally defraud the company of $60 million every year by creating false accounts that request fraudulent SMS OTPs, adding significant costs for the company.
Role of Telecom Regulatory Authority of India
TRAI, established under the Telecom Regulatory Authority of India Act, 1997, is responsible for regulating telecom services and deciding on tariff changes. It aims to create a fair and transparent policy environment, encouraging fair competition. The formation of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), as per an amendment to the TRAI Act, has transferred adjudicatory and dispute functions from TRAI. TDSAT addresses disputes between licensors, licensees, service providers, and consumers, handling appeals against TRAI’s directions, decisions, or orders.
