Peer-to-peer calling app Ringo, which was launched last week providing low-cost call options to consumers (19 paise/minute anytime and anywhere), quickly earned the ire of the network operators, who are already in stiff competition with players like WhatsApp. Ringo is currently waiting for approval from the Telecom Regulatory Authority of India (TRAI) to continue its business in India.
After running into stiff resistance from operators, Ringo sent out a note to all of its users and saying that it was suspending all domestic calls for an unknown period of time.
“We will be pausing Ringo domestic calling rollout until such time that we resolve this issue,” Ringo CEO Bhavin Turakhia said in a blog post, which has since been taken down by the company. “We believe we are on the right side of the law and hence expect a favorable resolution in due course of time,” he added.
Here’s how Ringo works: it buys bulk minutes from network providers via aggregators, and uses a connecting technology in the form of a conference bridge based out of Mohali in Punjab which in turn connects both the caller and recipient of the call. The problem is that Ringo uses voice instead of data to connect the calls, which, according to TRAI norms, is illegal. TRAI says that no company can buy minutes from multiple operators and become a minutes-reseller (this is allowed for data). aggregation of data.
Turakhia, however, claims that Ringo is “absolutely legal and complies with all aspects of the department of telecommunications (DoT) and TRAI regulations.”
According to reports, top network providers had allegedly started blocking calls using back-end support to the mobile-to-mobile calling service, forcing the app to suspend its offering. When Hindustan Times tried to make a call using the app, there were multiple failures with a message claiming heavy network traffic followed by another message about the lack of network availability.
“We have written to TRAI for checking the legality of the app because we believe that the app is flouting licence requirements set by DoT and TRAI norms. We will wait for TRAI to decide its fate,” Rajan Mathews, director-general of the Cellular Operators Association of India (COAI), said. An Economic Times report also quoted Airtel Chairman Sunil Bharti Mittal allegeing foul play on part of the app in offering reduced call prices.
According to Mathews, Ringo takes advantage of the new law of zero termination charges from and to landlines, which was brought in to help BSNL improve its profits. But when it comes to and from mobile calls, a 14 paise termination charge is levied.
The allegation against Ringo seems to be the fact that while it is connecting via the conference bridge in Mohali, it is bypassing these charges and making profits.
“In spite of being fully compliant with the law, the service allegedly seems to have been blocked as of half an hour ago [November 30] without any notice to our service providers,” Bhavin had writte in a blog post.
Currently, India’s telecom industry is in a flux with TRAI imposing compensation rules on operators who seems to have taken the low pricing of Ringo as a threat as they continue to face increasing pressure on voice business due to stiff competition from rivals, sequential fall in data realisation rates and continuing threat from messaging apps such as WhatsApp that offer free voice calls on telcos’ data networks.