For many Indian consumers, there’s robbery, daylight robbery and then, there’s the most shameless of all crimes: billing by mobile operators. Barely have the forced subscriptions to services you never asked for and the spam SMSes stopped, than the telcos want to make you overpay for something else: data. And the cover for this crime is a fancy phrase they call ‘differential pricing’.
What’s it all about? It’s easy to visualise a mobile operator’s business. Think of it like a water or electricity distribution system. They buy bandwidth from around the world, like getting water or electricity from a dam, and they distribute it using their pumps or sub-stations, called towers and then, through pipes and wires, that’s called wireless spectrum till it reaches your home, the mobile phone. Now, once the bandwidth reaches your phone or dongle, you use it for a variety of purposes. You can send an email, or browse the web or watch a movie. Just like you can use the water you’ve bought to water a plant, or make tea, or even wash your entire house if you like. You know always that the more bandwidth you consume, like electricity or water, the more you will pay. There are simple rates for water and electricity that you understand. You would imagine that it is just as simple for data, but the telcos want to change all that.
Imagine if your water board suddenly said: “hey, if you buy 200 ml of water to shave your face, its `one rupee. If you buy the same 200 ml of water and then make a cup of tea, its `5 rupees and if you were to use the 200 ml of water to wash your baby’s bum, it’s `10. Oh and God forbid, if you pour it into a glass of Old Monk, it’s a thousand rupees for the water. You’d be outraged.
But that’s exactly what the telcos are trying to pull off with their submissions to TRAI on differential pricing. They want the right to charge you for your bandwidth, not on some simple X rupees for y megabytes at z speed model which makes sense - but on what you end up doing with it. Use a 100 mb of data at 3G to browse the web - it might be `10; use it to hear a song, it might cost you `20 and use the very same amount of data at the same speed to watch a movie, it might be `50.
Is there any justification for the telcos to charge this way? None whatsoever. But they’re claiming that they paid a lot for licensing our mobile spectrum, and they will go broke if they are not allowed to steal from you. They quote tear-jerking tales like “sob sob, people used to use voice, which we could bill them a lot for, and now they use data to make calls on Skype and WhatsApp and sniff sniff we should be allowed to screw them over for this too or we will be penniless on the streets”.
There are a few lies hidden here. First, the telcos always used to push data through their pipes, even when they charged for voice - voice is just a form of data. And they made ungodly margins with no justification.
But now, as we use less of call minutes and more of megabytes, their price gouging is harder because Skype and WhatsApp do the routing and delivery work they once used to do. And these software programs cost much less.
The second lie is that telcos are in bad shape. In reality, Airtel reports over `10,000 crores in profit every year, and their profits are growing, like that of all operators. Then comes their argument that they paid a lot for spectrum while bidding for it, and they should be allowed to recover it. Which begs the question “You always knew expensive voice circuits were being replaced by cheaper data networks around the world, yet you bid unreasonable amounts. Were you stupid, or did you always figure you could lobby the government, Telecom ministry and TRAI into allowing you to overcharge and swindle consumers?”
The last lie they use is the most egregious. “Allow us to overcharge the rich so we can build infrastructure to service the poor.” The first untruth here is about building out the infrastructure and upgrading to 4G from 3G. They’re not doing it to help the poor, they’re doing it to compete with each other and offer a service that customers want. Nobody forced them to upgrade - they wanted to do it themselves. The second and more hurtful lie is that our poor probably know less how to type text on a keyboard, and they use voice or images on WhatsApp to communicate, just like they use videos on YouTube and Khan Academy to learn. On a percentage of usage basis, they’re more dependent on images, audio and video than text, compared to the rest of us.
Allowing mobile operators to charge customers more for using WhatsApp or YouTube (where all of the money goes to the operators actually and none goes to the apps, ironically) actually hurts the poorest of the poor. It’s anti-development. And it’s anti-net-neutrality.
There’s a reason we want the internet to be neutral. We don’t want Facebook to bribe people online by giving data free and then locking them up in a tiny jail of a micro-network. But remember, Facebook’s partner in crime there is a telco. Just as much, at the other end, we also don’t want mobile operators charging us for something they have no business charging for. Bandwidth is getting cheaper around the world - but threatening to get more expensive in India.
Bandwidth, like water and air, is becoming more and more of a fundamental right. If we want our poor and our future generations to develop, we have to ask our government to use our spectrum in a way that helps the most people develop the fastest. Which means we should make laws that force service providers who use our spectrum to provide the entire internet to as many people as possible, at a simple, low flat price. The time for swindling us citizens is over. It’s time to assert our rights to a neutral internet.
Which means nothing like Free Basics and nothing like differential pricing should be allowed on our airwaves.
The author is an investor and entrepreneur. He tweets at @MaheshMurthy
Email: mahesh@pinstorm.com