COAI: Govt should empower telcos to levy network usage charge on OTTs | The Financial Express

COAI: Govt should empower telcos to levy network usage charge on OTTs

According to IAMAI, the proposal for a revenue-sharing mechanism between OTTs and telcos would leave the startup ecosystem vulnerable to compliance costs even when they may be pre-revenue.

COAI: Govt should empower telcos to levy network usage charge on OTTs
BIF said regulation of OTTs would lead to a collapse of the entire app ecosystem, thereby impacting innovation and growth of the economy. (IE)

The Cellular Operators Association of India (COAI), which represents major telecom operators, has urged the government to provide a legal framework and empower telcos to levy a usage charge on OTT (over-the-top) players for using their network infrastructure.

In a letter to telecom secretary K Rajaraman, the association has pushed for the need to define ‘usage charge’ for OTT players in the telecom Bill. According to COAI, the charges will be calculated on the basis of the actual traffic carried by OTT players on the telcos’ network, which can be mutually decided between the telecom operator and OTT player.

“Any person (OTTs) using telecommunication services/ infrastructure/ network set-up/ provided by an authorised entity (TSPs) must pay reasonable usage charges to such provider,” SP Kochhar, director general of COAI said in the letter. In case the charges are not agreed upon mutually, the government may be mandated to prescribe that through an appropriate licensing and regulatory framework, Kochhar said.

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COAI has been batting aggressively for regulation of OTT communication players such as WhatsApp, Signal and Telegram through the telecom Bill. In its comments on the draft legislation, the association had said such network usage charges would not only compensate telcos, but also boost government revenues.

“Since the TSPs will be receiving revenues from OTTs as part of their telecommunications services rendered, they would automatically be paying licence fee to the government as part of TSPs’ AGR (adjusted gross revenue) on an incremental basis to the extent of the payments by OTTs to TSPs,” COAI had said.

In contrast, industry associations such as Broadband India Forum (BIF) and Internet & Mobile Association of India (IAMAI) have spoken out against the regulation of OTT players in the telecom Bill as their services are not similar to that of telcos.

According to IAMAI, the proposal for a revenue-sharing mechanism between OTTs and telcos would leave the startup ecosystem vulnerable to compliance costs even when they may be pre-revenue. BIF said regulation of OTTs would lead to a collapse of the entire app ecosystem, thereby impacting innovation and growth of the economy.

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In its letter to the telecom secretary, however, COAI said the charges for OTTs will be reasonable and limited to usage of the network without burdening startups and MSMEs.

“Our objective is certainly not to discourage the OTT services as indeed they generate massive traffic on the network set up by the TSPs. At the same time, these OTTs providers continue to gain massive direct/ indirect benefits at the expense of TSPs,” COAI said, adding that a similar regulation is in the works in countries like France, Italy, and Spain.

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First published on: 30-11-2022 at 01:15 IST