By Vivek Bhattacharyya

Edited by Anjini Chandra

In December, India’s leading telecom operator, Bharti Airtel, announced that it would charge customers for calls via VoIP (Voice over Internet Protocol) but backtracked five days later. The official reason stated was that the TRAI (Telecom Regulatory Authority of India) was still deliberating a consultation paper on that subject and therefore the move was premature. But what was unstated was that its customers and advocates of net neutrality were up in arms, forcing the telecommunication giant back to status quo.

Net neutrality as a principle means that all internet traffic should be treated equally, without bias to any service or website. Quite similar to the logic that one should be taxed for using a specific amount of water, regardless of whether the water was used to wash clothes or make coffee. But disturbingly, the TRAI has commented that Airtel’s move is not illegal, because currently there is no legislation regulating net neutrality. This debate assumes greater gravity in India, where a rapid penetration of smart phones has led to the government launching an initiative called ‘Digital India’, which targets increasing the usage of phones, to increase Internet coverage.

The crux of the problem lies with OTT (Over-the-top) services like Skype, WhatsApp, Viber and the like, which use data networks of telecom firms for their operation, offering voice calls either cheap or free of cost. In the beginning, these firms allowed them freely, hoping to incentivize customers to use these more. However with time, their popularity has sky-rocketed and customers are quickly opting for such services over regular calls and SMS or text messages. This cannibalized their earlier revenue from traditional calls and has been cited as the primary reason for Airtel to introduce differential taxing. They have made VoIPs expensive, forcing traffic back to conventional services, and are thus recovering lost revenue. These firms argue that they have made huge investments in broadband capacity and should therefore be allowed to charge on a differential basis, as to ensure an almost-equal usage of all services to recover optimum revenue back from that investment. In lieu of the same, they will have no incentive but will scale down future investments, which means jeopardizing India’s digital connectivity.

Currently, the TRAI is deliberating on an official stand on this issue, and further comments will have to wait till it releases its guidelines. Its stand will be keenly watched out for, as it will set a precedent for the future of the Internet in the developing world.

Net Neutrality Elsewhere

In November 2014, Barack Obama, the President of the USA, came out strongly against any such moves that eclipse net neutrality, tasking the regulator, the Federal Communications Commission (FCC) to issue guidelines protecting the same. This move surprised many, as federal regulators in the US are outside executive jurisdiction. Nonetheless, the President found support in a large number of telecommunication consumers, who expressed that they would feel cheated for having to pay for a pre-existing service using pre-existing infrastructure.

Net neutrality and it’s ongoing tussle merits several questions. Can Airtel’s claim of a massive investment be allowed to prevail over the fact that several startups, such as Justdial and Flipkart, have been success stories, because of pre-existing Internet availability? Paraphrasing, could these companies thrive if telecom companies charge more for shopping over Snapdeal or finding the nearest restaurant on Zomato? This is the concept of violation of net neutrality – to discriminate between services.

Moreover, the Internet, which continues to be an open platform, will soon be held captive, as they will decide how the traffic will be routed and where. One remedy that has been suggested is by way of further competition. The Bharti Group, along with Japan’s Softbank, currently run the messenger application Hike, which is seen as a close rival to WhatsApp and Viber. If Hike beats its competitors in consumer popularity, it will divert all traffic to itself, fashioning itself as a potential source of revenue for Bharti Airtel.

Interestingly, when Airtel, Vodafone and other firms pushed for a free Facebook application in February 2013, nobody complained, even though it violated net neutrality. So are consumers a selfish lot? Airtel will likely lobby this angle for a favourable outcome. Meanwhile, smart phone users wait for the TRAI’s decision with bated breath.

Vivek Bhattacharyya majored in Electronics Engineering, and is a Foreign Policy and International Relations enthusiast. He was formerly associated with Non-Traditional Security Research Centre (NTS-RC) at Institute for Defence Studies and Analyses (IDSA), and Observer Research Foundation, besides having written extensively to The Hindu and the Indian Express on similar issues. Other interests include constitutional and international law, socio-political issues and literature. He believes human stupidity is a far bigger threat to mankind than ISIS, and can be reached at or

Posted by The Indian Economist | For the Curious Mind