In Business Model, Internet Access, News

The Telecom Regulatory Authority of India has banned zero rating, the ability of an Internet access provider to offer access to some Internet apps without requiring purchase of a data plan, or levying usage charges for use of those apps.

But TRAI has not issued clear guidance about what service providers will be allowed to do, in terms of creating managed services. TRAI recently has suggested that no currently-offered Internet app or service can be refashioned as a managed service.

Some might argue that zero rating is precisely what will eventually be required to create incentives for the “unconnected” to experiment with and then become accustomed to use of Internet apps. The reason is simply that mobile data is too expensive for many non-users who do pay for mobile voice and text messaging services.


Now TRAI appears to be attempting to create such frameworks, the key issue being permissible revenue models. So far, TRAI has suggested that some current models might make sense.

One possible  model is to offer an incentive or reward to users when customers download certain application or take some defined activity on a particular website.

In this reward based model apps may provide rewards in the form of a recharge for data usage or for voice usage to the users, TRAI suggests.

Perhaps ironically, TRAI suggests another possible model is sponsored data, where there is a “toll-free” approach. “This model is also prevalent in many developed markets, allowing free access to certain websites and applications,” a TRAI consultation paper says.

A reimbursement model might also be permissible, TRAI suggests. In that model, the user pays for usage, but then some third party reimburses the user.

Every country has a distinctive way of approaching regulation and economic freedom. India is not an exception in that regard. Though it is not the current approach, some might argue the simplest approach is simply to allow zero rating.

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