Daybreak - Why is Truecaller protecting you from spam calls instead of TRAI?

Episode Date: July 8, 2024

For a country that boasts of its digital public goods infrastructure like Aadhar and UPI, it is a wonder why telecom has been so ignored. After nearly 1500 crore rupees of was reportedly lost to digital fraud in the financial year 2024, the govt's TRAI is finally scrambling to catch up with CPAN or the Calling Name Presentation (CNAP) service, its own version of Truecaller.Truecaller, the Swedish call-screening company, meanwhile, has been holding the fort for a while now. Users count on it to save them from spam and fraud calls. While TrueCaller maybe looking like a hero in this situation, it is a private company after all. It is  using this opportunity to make money from both users and businesses. But its success in India is also built partially on how inadequate privacy laws are in India. It company has been accused of breaching data privacy norms in the past.Can TRAI replace Truecaller?Tune in.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too? It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production. Sita and I are still reeling from the intensity of our first studio recording.

Intermission launches on March 23rd. To get alert, as soon as we release our first video. episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Dhrashji Singh is a Mumbai-based lawyer who has a 12-year-old son. In May this year, she got a phone call from a stranger, a man, saying that her son was in an accident.

The man told her that he was taking her son to the hospital and that he would need 30,000 immediately. Now, I know in your mind you're immediately thinking, well, this sounds like a scam. But if you put yourself in Droshti's shoes, it is her son we're talking about. What if it were true? Every minute counts, right? It's a matter of life and death. So she transferred the money and rushed to her son's school. He was, as you may have expected by now, perfectly fine. She tried to call that number many, many times, but it was already switched off. So she went ahead and did the next logical thing. She lodged a police complaint. And the next step?

Reported to the telecom authority or try, right? But that's not what Trashty did, nor did any of the other tele-scam victims that we spoke to. In fact, they seemed pretty clueless about going to try for telecom frauds. But they all knew Truecaller, the Swedish Call ID app. So they reported all these numbers to True Caller and not try. So True Caller seems to be basically stepping. in to do what try should be doing, right? But of course, it is also taking full advantage of this.

It is using this opportunity to make money from both users and other businesses. Also, very important to note here is that while Truecaller may be looking like the hero in this situation, it is a private company after all. And its success in India is also built partially on how inadequate privacy laws are here. The company has been accused of breaching data privacy norms in India. So, what is the government up to? With nearly 1,500 crore rupees being lost to digital frauds in the financial year 2021, the government is finally scrambling to catch up. The new government's first 100-day plan includes enabling try to tackle spam and scam calls. But can try match up to true caller? Welcome to Daybreak, a business podcast from the Ken. I'm your host,

Nagda Sharma and I don't chase the news cycle. Instead, every day of the week, my colleague Rahal Philipos and I will come to you with one business story that is worth understanding and worth your time. Today is Monday, the 8th of July. For a country that boasts of its digital public goods infrastructure like Adhahar and UPI, it is amazing how telecom has been so ignored. So much so that a foreign private company is doing its job. So what does Truecaller really do? It's quite simple. It gives users the power of choice. They can decide which calls they want to take. And with the deluge of scam and spam calls that we receive, this is essential now. So Truecaller has become a user's constant companion that allows them the option to block such

numbers and also mark them as fraud and spam. The company uses a crowdsource data model to mark four numbers as spam. My colleague Roner Kumar Gunjin spoke to two four former True Caller executives. They said that they did not know exactly how many such markings were required for the company to push a phone number into the spam basket, but one of them did say that it varies according to the type of scam. True caller is basically offering welfare as a service. It offers a premium subscription starting at 132 rupees, and with it, you get features like zero ads, call recording and a lot more. In the March 20204 quarter, True caller generated over 1 million US dollars in monthly revenue from its nearly 2 million premium subscribers in India.

This is a 20% increase in average revenue per premium user in India compared to the same period last year. But there is a flip side to this. Stay tuned to find out. So when a retail user reports annoying calls, businesses trying to reach a customer to deliver items or to inform them about a bill's due date to face rejection. True caller saw an opportunity here to make itself another revenue stream, an enterprise division. So businesses like lenders, e-commerce companies and telcos that use call centers want to partner with true caller to make sure their calls are taken. Industry executives say that a verified tag lets businesses identify themselves to people as legitimate organizations.

Take, for example, perfect finance. It is a South Delhi-based non-bank that mostly deals with two-wheeler and three-wheeler financing. The small-sized lender wanted to focus on a higher-income group and target customers of more expensive second-hand two-wheelers. An executive there told us that the first hurdle was in reaching out to potential customers. Initial calls were answered, but soon called rejection rates soared. New leads dried up and there was no progress towards breaching a new income group. It was only a couple of months later that the company's sales executives found out that True caller users had marked their phone numbers as spam.

So to undo the impact of True caller users, the lender now wants to tie up with True Callers Enterprise Division. The former True Caller executives said to us that True Caller carries out an internal seven-step process before granting the verified tag. On average, the tag easily improves call pickup rates by 30%. and some companies even report a 50% rise. The verified tag also has another advantage for enterprises that not many know about. The number of spam markings that are required to push a verified enterprise's phone number in the red

is much higher than what is needed for an unverified one. But the executive said even then if the business attracts spam or fraud markings, then it is pushed into the red. Once a number is declared as spam or fraud on true caller, it cannot be undone. The company does not deal as numbers from the spam category in exchange of money, because that would kill the purpose of true caller itself. So you see, in a situation where retail users cannot stand spam calls,

and businesses, on the other hand, want to reach out to more customers, True caller is gaining the most. Meanwhile, Try is still figuring out how to step in. And what makes Try different from True Caller is that its end goal is consistent. consumer protection and not profit. But telcos are not very happy with Try's proposal. Stay tuned to find out why. So Try is now pushing for the quick implementation of something called

the Calling Name Presentation Service or Snap, which has actually been in the work since 2022. But before I tell you what it is, just a quick reminder, India has the world's second largest telecom network with 1.2 billion subscribers. Snap is basically the government's version of, a caller ID function, quite similar to true caller, but for free. This month, telecom operators like Bharty Airtel, Vodafone Idea and Reliance Geo launch trial sessions across states such as Maharashtra and Haryana.

Now, Try wants to zero in on a launch date for SNAP, and it also wants to make it compulsory for all. And this is what is bothering the big telcos. So the plan for the telecom operators is to help share a caller's identity with the receiver and give them the right to make an informed choice about receiving calls. Now, unlike TrueCuller's crowdsource model, Telcos will be using the K-YC or know-your-customer data of users shared during SIM card registrations. A Vodafone executive told us that this addresses the issue of wrong names popping up on the phone screen, which often happens with

Truecaller. But the concern here is privacy. They said, and I'm quoting, if the proposal is implemented, it will become compulsory for all. Where is consent? There needs to be an opt-in service. Not everybody wants to share their identity with others. End quote. In the case of Truecaller, people have that choice to download the app or stay away from it.

Try, 2, needs to come up with such an option. But in either case, it is a lose-lose for the end user because they will have to part with their data irrespective of whichever service they opt-in for. A senior Aetal executive said that telcos had opposed the umbrella launch of their service. They had even proposed to restrict the feature only for commercial calls, that is, a receiver should know which company is calling them, much like True Caller for business.

But now, with the SNAP plan, the responsibility has transferred from TRI to TELCOs. It has asked them to specifically cater to consumer complaints related to spam calls by creating a dedicated team if they don't have one already, and also making their websites more user-friendly. So for now, Try seems to think that the best way to do this is to pass on the challenge of tackling Truecaller to the telcos. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform.

What you're listening to is just a small sample of our subscriber-only offerings. A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. To subscribe, head to the ken.com and click on the red subscribe button on top of the Ken website. Today's episode was hosted by Snigda Sharma and edited by Rajiv Siyah.