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TRAI, GoI should bear USSD cost

The telecom regulator’s proposal to make telecom companies bear the cost of banking and telecom services based on unstructured supplementary service data (USSD) must be revisited. Making the service free for the consumer is appropriate but there is no reason for the cost of providing the service to be borne by telecom operators. Given the multiple benefits that the USSD services provide to society at large and to the government, the state must bear the cost and compensate the telecom companies.

The move to push the cost of USSD-based services on to the telcos is of a piece with the government asking digital payment infrastructure providers to grin and bear the cost of their huge effort to populate every pushcart vending coconuts or fruit, every little corner shop and every parking lot, at least in large towns, with interoperable QR codes for digital payment services, even as the banks, the RBI and the government reap the benefits of the spread of digital payments. Digital payments for small amounts fetch no fees for the payment infrastructure providers. This is unfair and counterproductive. The greater the spread of digital payments, the lower the burden on bank counters for disbursing/depositing cash; the lower, also, the banks’ cost of storing and transporting cash. The RBI’s expenditure on printing currency, and handling cash chests would come down, too. The government gains from better transparency on transactions. These entities should compensate digital payment companies for their costs.

In the case of USSD-based services, the goal should be to phase them out, by replacing feature phones with data-enabled smartphones in everyone’s hands. Access to wireless broadband is a great enabler. USSD is best seen as an interim facility. The World Stock Markets


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