The Telecom Regulatory Authority of India (TRAI) released a consultation paper on the definition of international traffic in May 2023. The paper addresses queries received by TRAI in 2021 from two separate unnamed entities. These entities had requested the regulator to instruct telecom service providers (TSPs) to allow the transmission of their SMS traffic under the domestic route. The subject is of significance because, at present, only domestic SMS termination charges are regulated in India, while TSPs have the autonomy to set termination charges for international SMSs. Some experts suggest that the main reason for this request pertains to transactional messages, such as one-time passwords, e-receipts and delivery updates, from multinational companies to customers. These messages are generated on international servers but transmitted through domestic servers, creating challenges in categorising them as domestic or international SMSs.
In the consultation paper, TRAI notes that the term “international traffic” has not been defined in the unified licence (UL) agreement. Since international SMSs can be considered international traffic, the regulator is of the view that instead of defining international SMSs in the UL agreement, it would be appropriate to define the term international traffic. TRAI proposes a possible definition of international traffic, which may be included in telecommunication service licence agreements, “International traffic is the international long distance (ILD) traffic originating in one country and terminating in another country, with one of the countries being India.” As part of the consultation process, TRAI invited comments and counter-comments from stakeholders and convened an open house discussion in August 2023.
While global technology firms operating in India, such as Amazon and Truecaller, have sought a clear definition of international traffic, private telecom operators have rejected the call to define it. A look at the key arguments presented by both sides…
Technology giants and industry associations recognise the need for clear and unambiguous definition of international traffic to ensure the widespread adoption of SMS technologies for businesses to reach their customers in India. As per these organisations, the lack of clarity on international domestic SMSs allows TSPs to adopt their own interpretation and categorise a message generated by a computer server located outside India as an international SMS, even when the SMS originates and terminates within the network of Indian TSPs. Entities sending SMSs to their customers for better business practices are often subjected to the higher tariff rates set by the TSPs. However, most proponents believe that the current definition proposed by TRAI may not be feasible in the present context.
According to the Broadband India Forum (BIF), the term “originating” may still cause confusion as it does not clarify where the origination occurs. “Originating” should be clarified to mean originating at the TSP’s network. The absence of this clarification may lead to ambiguity and arbitrary interpretations by TSPs. Meanwhile, according to the Internet and Mobile Association of India, definitions for international and domestic traffic should prevent the misclassification of application-to-application and application-to-person (A2P) messages that originate as data prompts outside India as international SMSs. Amazon India presented similar arguments for a clear definition of international traffic. In addition, Bharat Sanchar Nigam Limited diverged from its private sector counterparts, stating that there is a need to not only identify international traffic but also the routing of traffic in a way that is easy to interpret.
In its comments on the consultation paper, Truecaller stated that the definition of international traffic, along with the inclusion of a well-defined concept of domestic traffic, would not only enable ease of doing business but also provide regulatory clarity, improve resource management efficiency and international interoperability, and foster innovation and market growth. In a recently held open house discussion, Truecaller noted that it has been charged almost 15 times the domestic rates even though its SMS routes do not leave the Indian geography at all. The company argued that the lack of clarity in the current definitions is being misused due to the company’s headquarters being in Sweden, resulting in higher charges. It further stated that businesses engaging in domestic messaging should have distributed ledger technology (DLT) registration under the Telecom Commercial Communications Customer Preference Regulations, 2018. However, Truecaller is being charged international rates despite having DLT registration.
To this end, tech firms and industry associations have proposed alternative definitions for international traffic, all of which are fundamentally similar. BIF has proposed that “International traffic shall mean the international long-distance traffic originating from the networks of a TSP in one country and terminating in the networks of a TSP in another country, where one of the countries is India.” This definition, as per BIF, clarifies that traffic should originate from and terminate within a TSP’s network.
Telecom operators have strongly opposed the need to define international traffic. They have argued that in the absence of a definition of international traffic, they have the flexibility to interpret terms such as “international SMS”. Accordingly, certain TSPs have defined international SMSs in their code of practice (CoP) as “any data/application/system/servers, etc. that influences, generates, controls, facilitates or enables the generation, dissemination or transmission of messages from a location outside the territory of India will constitute as international messages. Any mirroring solution in India shall not impact or change the nature of such international SMS to national SMS”.
According to the Cellular Operators Association of India (COAI), the UL agreement provides the definitions for ILD networks and ILD services, and therefore, there is no need to define international traffic. In its comments submitted to TRAI, COAI argued that there is absolutely no need for an intervention to redefine an accepted telecom service/traffic type that is well-functioning, efficient and relevant. It must be clearly understood that any SMS/traffic originating from outside India, which ultimately enters the Indian public switched telephone network (PSTN), can only be delivered through the legitimate route, that is, through the international long-distance operator (ILDO) route. The association believes that the actual need is not to define international traffic but to clarify that SMSs originating from international servers and presented as domestic SMSs by introducing a proxy server in India (as was the case for grey voice calls) should be classified as international messages as per existing licensing norms.
Bharti Airtel has submitted that the definition of international traffic has never been an issue in telecom over the past 30 years. The telco argues that a non-existent issue is being made into a concern by some non-telecom entities to further their own commercial interests by adopting a disguised practice that bypasses the licensing framework to transmit their international SMS traffic, which is nothing less than a grey route. According to Airtel, the industry definition of international SMS in all categories – A2P or person-to-person – as given in the CoP, is self-explanatory and appropriate, and it should remain the same. The operator suggested that TRAI should instead emphasise compliance and penalise those entities that falsely route international SMSs, including A2P, as domestic SMSs. It further recommended that the prices of international SMSs should continue to be determined under the forbearance and prerogative of Indian TSPs as per the globally accepted practice.
In addition, Reliance Jio stated that SMSs sent by the aforementioned entities fall under the international A2P SMS category and originate from servers located outside of India, which are then routed to India through internet/leased lines and terminated in the Indian PSTN using media gateways/mediation servers within the country. Jio submitted that such a setup is deployed to avoid paying international SMS termination charges. SMSs sent to domestic operators through such an arrangement cannot be termed domestic messages. Classifying such SMSs as domestic would lead to the same menace that is prevalent in the illegal grey-voice calling route, which the government has been trying to address for the past several years. Vodafone Idea Limited added that the masking of international SMSs as domestic can pose threats to national security and result in phishing messages. It also siphons away a major chunk of revenue that otherwise could have gone to ILDOs and the government in the form of levies and taxes.
The way forward
With the conclusion of the consultation process on the definition of international traffic, TRAI is expected to soon release its recommendations on the subject. These recommendations will lay the groundwork for future policies and regulations regarding international traffic in the country.