Telcos’ Demand For Reasonable ‘Usage Charge’ From OTTs Fair & Rational: COAI

Cellular Operators Association of India (COAI) on Monday reiterated its position that the demand of telecom operators for a reasonable ‘usage fee’ from OTT Communication service providers for leveraging their networks to provide profitable services is fair and rational, and would aid in developing the country’s digital infrastructure while contributing to the economy.

The statement from COAI came after Internet & Mobile Association of India (IAMAI) last week said COAI’s demand for ‘revenue sharing’ are a covert attempt to dilute net neutrality in India.

“Certain entities with vested interests are misdirecting the issue of the need for a regulatory framework for the communication OTTs and the need of usage charge to be paid by OTTs to the TSPs, by bringing in the aspect of Net Neutrality in a misleading manner, to make it a populist issue. We reiterate that all our member TSPs are committed to follow the Net Neutrality principles as per their licensing conditions,” Lt. Gen. Dr. S.P. Kochhar, Director General, COAI.

COAI says that there seems to be lack of appreciation of the fact that net neutrality pertains to non-discriminatory treatment of content which has no nexus to the usage fee issue. Telecom Service Providers are committed to follow the Net Neutrality Principles, as per their license conditions, as also all other regulatory and security compliances which the TSPs undertake to safeguard consumer interest and security - which OTTs presently do not.

The proposed usage charge is to justly meet the funding requirements for creating a robust telecom infrastructure in India, increased revenue for the exchequer, and continued innovation, as is the need of the hour for India’s growing digital ecosystem. It has been proposed that OTT communication services pay a network usage charge to the concerned TSP in a fair and equitable manner for the actual traffic carried by these OTTs on TSPs’ network based on measurable usage. This usage charge will contribute towards the development, maintenance and upgradation of the network infrastructure, COAI added.

Last week, IAMAI said higher cost associated with internet usage would lower overall revenues of internet businesses and may even reduce the amount of data consumer would use. This would result in a scenario where there may be no meaningful growth in the revenue of TSP, despite the massive price paid by the digital economy.

In contrast, COAI opines that the revenue collected by TSPs from the OTTs will help the TSPs rollout and expand networks to meet the infrastructure requirements for OTT services. It may also be noted that the revenues thus collected will count towards the TSPs AGR calculations. Hence, the OTTs will effectively be contributing to the national exchequer through the TSPs.