Late Friday, the Telecom Regulatory Authority of India (TRAI) issued an amendment to its original ruling dated 27 April 2009 on the provision of value-added services (VAS) to customers. The new ruling no longer requires an explicit customer originated call, SMS, fax or email to subscribe to VAS. While a double confirmation still has to be obtained, the customer can do this by pressing a few keys on the mobile handset.

OnMobile reported a significant slowdown in annual revenue growth in the first quarter driven by the TRAI directive, an internal cost-related restructuring at one of its customers, delay in network rollout by another customer resulting in revenue deferral and a general slowdown in domestic VAS revenue growth due to falling industry ARPUs.

We believe the amendment is a result of detailed representations made by service providers, industry associations and VAS providers such as OnMobile on the detrimental impact that the earlier ruling could have on growth of VAS in the country.