COAI & BIF At Loggerheads Over OTT Apps Licencing Regime

After the government released the draft telecom Bill for consultations and recommendations, the debate of licencing over-the-top (OTT) communication apps and telecom providers has been an ongoing one. The latest updates mark a rift between the Broadband India Forum (BIF) and the Cellular Operators Association of India (COAI).

Last week, BIF wrote a letter to the Department of Telecommunications (DoT),  stating that if the concept of paying network access charges is to be accepted, then telcos should also pay the OTT platforms. BIF stated that OTTs are not free riders and are actually responsible for more than 70% of the telco traffic. 

Previously, COAI told the DoT that OTT platforms must “contribute towards creating and developing digital telecom infrastructure in India in exchange for using the services”. Countering, COAI called BIF’s argument “ludicrous a suggestion as can be imagined”. 

“By a very simple analogy, telecom networks are akin to roadways wherein the services for public consumption – such as public transport vehicles like buses operate – are similar to the OTT service providers. The outrageous suggestion of roads paying to vehicles for getting passengers on their network is unheard of. OTTs, though, are not paying anything to the TSPs presently for their network costs,” the industry body reportedly said.

According to COAI, besides spending a large amount for spectrum acquisition and network infra, telecom service providers have already contributed more than INR 17,600 Cr towards licencing fees and more than INR 7,000 Cr towards spectrum usage charges (SUC) in FY22 alone – this was also used by OTT apps.

All Users Must Pay Infra Usage Fee Including Telcos, Opines BIF

Industry body BIF, however, is of the opinion that the infrastructure for any communication network also includes data centres, undersea cables, content hosting centres, content delivery networks and more – all of which are built by the OTT platforms. 

“If the concept of paying network access charges is to be accepted, the telcos should also pay the OTTs for all the above,” BIF said implying that infrastructure usage fees should be levied on all users uniformly.

“This concept of paying for the use of infrastructure is an excellent concept wherein any entity that uses another entity’s infrastructure, should pay for it. However, the revenues earned by the infra provider should also be shared with the entity using it in the same proportion,” it added.

BIF’s response came shortly after COAI submitted that a legal framework should be put in place for OTT players who use network infrastructure. OTTs should directly pay the telecom firms on mutually agreed terms, the telcos’ representative body has argued.

Understanding The Provision Of The Draft Telecom Bill

The draft telecom Bill was open for discussion until November 20, 2022, and saw a major pushback from the industry over the ambiguity in definitions. 

Since the Bill expands its scope to telecom services and networks, many telecom industry stakeholders have largely argued for the inclusion of OTT communication services. Other contesting points include the umbrella inclusion of internet-based communication services, internet and broadband services and even DTH services. 

COAI hinted at an ‘interconnect charge’ (say network access charge) to be paid directly to the telecom operators based on the user traffic. OTT communications apps should compensate telecom carriers for using their networks and infrastructure, it said.

According to the BIF, traffic from OTTs forms a major part of telcos’ revenues since OTT users are the ones using the network most.