Telecom players write to government again to address revenue sharing model with OTT providers

Cellular Operators Association of India (COAI), which represents telecom operators such as Bharti Airtel, Reliance Jio and Vodafone Idea, has written to the government on concerns regarding vital requirement for contribution by stakeholders towards addressing rising data traffic and associated infrastructure costs in Indian telecom industry.

It was in continuation of the letters that COAI had sent earlier too, requesting the government to take note and addresses the crucial issue of large traffic generating (LTG) platforms/applications, including over-the-top (OTT) service providers to share the rising network costs.

LTGs put a disproportionate amount of data traffic on the networks, enjoy the benefits of telecom infrastructure built and maintained by operators for gaining profits giving rise to this debate, the industry body said.

“The deployment of 5G and the future 6G also necessitates increasing deployments on the edge with enhanced network capabilities. Besides the high cost for the same, the increased power consumption, optimisation, as well as infrastructure maintenance costs also need to be kept in mind,” sources told businessline quoting the letter.

COAI, in a white paper earlier, had also mentioned that there is a potential loss of around ₹800 crore to the government exchequer in the absence of cost sharing by LTGs, which is expected to increase further in the coming years if not addressed on time.

LTG hypocrisy

“We would like to highlight that while certain LTGs and their advocates have been suggesting that a fair share contribution would adversely impact the start-ups ecosystem in the country, ironically, recent developments indicate to the contrary as the financially-motivated approach of the LTGs surfaced when an Appstore provider (a global LTG) was found removing startups and smaller India-made applications/players from its online property, quoting reasons of non-payment of their quoted charges to these applications, for hosting them,” the letter addressed to Neeraj Mittal, Secretary, Department of Telecommunications, said.

The same foreign LTGs “vehemently oppose” the fair-share proposal for the additional costs borne by the telecom service providers (TSPs) for carrying their disproportionately large traffic and provisioning the increasingly demanding infrastructure required to deliver so. They prefer to enjoy a freeride over the Indian TSPs’ networks, while profiting heavily from them, the letter said.

“It may be noted in this regard that the Indian TSPs have maintained from the beginning that smaller players, start-ups and MSMEs which generate low traffic would not be required to pay the fair-share charge. Only the top LTGs which generate mammoth volumes of traffic would have to contribute the same to share in the rising network costs,” the letter added.