Takshashila Policy Advisory - Quality of Service Based Differential Pricing for Data Services

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.

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.

Authors