Policy Advisory — Quality of Service Based Differential Pricing for Data Services

Quality of Service Based Differential Pricing for Data Services
In response to comments sought by the Telecom Regulatory Authority of India on Differential Pricing for Data Services

Sudeep Divakaran, Pranay Kotasthane and Pavan Srinath, The Takshashila Institution
Takshashila Policy Advisory 2016-01

This document is the authors’ formal submission to the Telecom Regulatory Authority of India (TRAI). TRAI floated a Consultation Paper on Differential Pricing for Data Services in December 2015 to elicit views from stakeholders and the general public.

Download the Policy Advisory in PDF format (176 KB) 

Executive Summary

Differential pricing for data usage for accessing different websites, applications or platforms will be detrimental to the internet ecosystem in India.

Instead, the industry is now mature enough to allow Telecom Service Providers (TSPs) to offer differential pricing based on Quality of Service (QoS) of the channel, enabling TSPs to charge differentially for providing specific network capabilities based on user requirements.

Along with QoS based differential pricing, this paper proposes two other alternatives: one, the government should open up the telecom service market to greater competition, perhaps by issuing unlimited licenses. And second, TRAI may consider utilising the Department of Telecom’s Universal Service Obligation (USO) Fund with the specific focus of getting more Indians online.

Providing free internet connections is a very limited way of looking at the problem of universal internet access. This paper defines the problem of universal internet access as one of ensuring the maximum number of people take up to the internet in the shortest duration possible, ensuring that India’s IT industry remains globally competitive and enabling the telecom and mobile service provider industry to remain healthy and competitive.

Download the Policy Advisory in PDF format (176 KB) 

This policy advisory can be cited as: Sudeep Divakaran, Pranay Kotasthane and Pavan Srinath, "Quality of Service Based Differential Pricing for Data Services", Takshashila Policy Advisory 2016-01. (2016) www.takshashila.org.in.

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