Telcos Vs OTT Debate On Sharing Revenue Is Ludicrous: COAI

Big Tech Advocates’ Suggestion Of Telcos Sharing Revenue With OTTs Is Ludicrous: COAI

SUMMARY

In November, the COAI wrote to the DoT that OTT communication platforms should be made to pay ‘usage charges’ to telecom operators

The Broadband India Forum argued that the OTTs were responsible for driving 70% traffic of the TSPs and the telecom operators should also share their revenues with the former

Telecom operators’ demand for charges from OTT based on the premise that OTTs use their networks to provide competitive services: COAI

The Cellular Operators Association of India (COAI) on Thursday called the suggestions by “Big Tech Advocates” about telecom operators sharing their revenues with over-the-top (OTT) platforms as “ludicrous”

“There are misleading views being propagated in the media by big tech advocates basis the legitimate demand of the TSPs seeking a usage charge from OTTs,” the COAI said in a statement.

It must be noted that the COAI wrote to the Department of Telecommunications (DoT) in November that OTT communication platforms should be made to pay ‘usage charges’ to telecom operators. The industry body also urged the government to incorporate a mechanism into the draft Telecom Bill by defining usage charges and defining what constitutes an OTT communications platform.

While the COAI’s latest statement didn’t name any organisation, it was likely referring to the Broadband India Forum (BIF). In a letter to the DoT in response to the telecom industry body’s suggestions, the BIF said that the COAI’s demand has “no substance nor any basis for any meaningful dialogue”.

The BIF said that the OTTs are responsible for driving 70% traffic of the TSPs and the telecom operators should also share their revenues with the former. Besides, the COAI should also pay the OTT platforms for building data centres, undersea cables, content hosting centres, among others, the BAI argued.

In its latest statement, the COAI said that the demand of the TSPs for levying usage charge on OTTs is based on the premise that OTTs use their networks to provide competitive services like voice/video calling and messaging to the same consumers.

Sharing an analogy, the telecom industry body said that telecom networks are akin to roadways wherein public transport like buses (OTTs) operate. While the user pays the bus as a ticket for the ride, the bus has to pay road taxes which are equivalent to usage charges OTTs are supposed to pay to telcos.

“The outrageous suggestion of roads paying to the vehicles for getting passengers on their network is unheard of,” it said.

The COAI further highlighted the expenses telcos have to bear to enable the services to OTTs for which currently no charges are being paid. It said that the TSPs contributed an amount of Rs 17,627 Cr towards licence fees and INR 7,073 Cr towards spectrum usage charges in FY22 alone.

“This is besides the mammoth amounts invested towards spectrum acquisition and network infrastructure,” it added. “In fact, apart from land, Indian TSPs too have invested heavily in laying undersea cables for setting up their international network connectivity”.

Besides, OTTs consume humongous bandwidth which stresses the telcos’ networks and demands regular upgradation, it said.

Keeping the entrepreneurial and startup ecosystem in focus, the COAI suggested that OTT players with low usage need not be required to pay any charges.

It must be noted that the DoT published the draft Telecom Bill in September 2022 to regulate the telecom sector and OTT communication apps. However, the draft Bill came under criticism from industry bodies such as the Internet Freedom Foundation (IFF) and the Asia Internet Coalition (AIC), other industry stakeholders, and even the Telecom Regulatory Authority of India (TRAI) due to some of the proposed regulations.