OTTs that generate large data traffic in India must pay telcos: COAI

NEW DELHI — The industry stakeholders on Thursday asked the government to provide a legal framework to ensure that over-the-top (OTT) players that are large traffic generators pay a fair and proportionate share to telecom/mobile service providers for the services provided by them, adding that the telcos' demand for reasonable 'usage charge' from OTT providers is fair and rational.

India is undergoing the fastest 5G rollout in the world and more than 3.3 lakh 5G base transceiver stations (BTSs) have already been deployed by the telecom service providers.

“While Telcos have been carrying the massive investment burden for deploying networks and delivering connectivity across the country entirely by themselves, OTT players have emerged offering bandwidth-heavy services and generating disproportionately high traffic, compelling further upgrades and capacity enhancement of the networks, but contributing nothing to the network expenses,” lamented Lt Gen Dr SP Kochhar, Director General of the Cellular Operators' Association of India (COAI).

The OTTs are majorly owned by large global corporate entities with massive earnings, who earn twin sources of revenues from consumers as well as advertisers.

“However, their revenues do not contribute to the Indian economy as they get carried to their country of origin. COAI believes they need to contribute to this Indian market which has been acknowledged as one of the biggest globally by such OTTs,” he said during a media briefing on ‘Regulatory Mechanism for OTT Services’.

Even in rural areas, where mobile network operators don’t have viable business cases to roll out services, OTTs have led to increased demand for data services/bandwidth, with nominal average revenue per unit (ARPUs) not justifying the network expenses incurred to facilitate it.

“Therefore, in terms of revenue generation, the focus of the telecom service providers would now be on networks, applications and innovative services, which includes OTTs,” said COAI.

While high bandwidth OTT applications carry heavy traffic with high requirements like HD video streaming, downloading and sharing, “a fair and proportionate charge needs to be paid to the Network Provider for facilitating their business,” the industry body argued.