The Telecom Regulatory Authority of India’s proposal to exempt Content Delivery Networks (CDN) out of the net neutrality regulation could benefit integrated players such as Reliance Jio and Bharti Airtel.
Content Delivery Networks enable telecom service providers deliver content within their network without going through the public internet. Both Airtel and RJio have their own content and applications, which they can offer to their users through a CDN platform.
“The proposed regulations are likely to give integrated operators an upper hand versus pure play connectivity providers. Any operator with own content platform, which is working only on its own network, will be able to charge differential pricing. This may give such an integrated operator advantage versus a pure play connectivity provider,” said a research note from Edelweiss.
“We expect Reliance Jio and Bharti Airtel to be key beneficiaries as they already have a presence in content platforms,” it added. RJio has JioTV, JioCinema, JioMusic, JioCloud, JioMags, and ownership of various news networks, including Network 18. Bharti Airtel has Wynk Movies, Wynk Music and Wynk Games to sustain leading positions in this space. They could leverage CDN exemption and offer platform content at lower prices to drive traction within their subscriber base.
The other big let-off for telecom operators is the TRAI’s decision to exempt specialised services without specifying what type of services would be exempted. While DoT will define specialised services, operators could find loopholes in this to enter into specific content deals.