Telecom companies vs OTT companies: The ‘letter war’

It’s once again an open war. The Cellular Operators Association of India (COAI), the industry association representing telecom companies in India — Reliance Jio, Airtel and Vodafone-Idea — is up in arms against the Broadband India Forum (BIF). The body representing telecom companies is miffed over BIF sending a letter to the Department of Telecommunications (DoT) saying that the telcos should also pay the OTT platforms. The BIF letter said that OTT platforms must contribute towards creating and developing digital telecom infrastructure in India in exchange for using the service.
It’s as ridiculous as can be
Responding to the letter, COAI said that this is as ludicrous a suggestion as can be imagined. It termed the decision akin to roads paying vehicles for driving on them. “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 the 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 said.
The COAI said that OTT platforms not only cannibalise the services offered by the telecom companies, they also consume huge amounts of bandwidth. This stresses the telcos’ network and makes the continuous upgradation and development essential.

According to the COAI, telecom service providers have contributed an amount of nearly Rs 17,627 crore towards licence fee and Rs 7,073 crore towards spectrum usage charge (SUC) for FY 2021-22 alone. This is besides the mammoth amounts invested towards spectrum acquisition and network infrastructure.
“OTTs, on the other hand, have nil or very miniscule contributions to the government despite their robust revenues. Communication OTTs do not contribute to the exchequer in the form of taxes, levies, licence fee etc., as they are not presently regulated by the Ministry of Communications, although their services are similar to that provided by the telcos,” added COAI. The body again reiterated its demand for bringing OTT communication services under the Telecommunication Act.
What did BIF letter say
The BIF letter sent to DoT said that OTTs are not free riders and are actually responsible for more than 70 per cent of the telco traffic. “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,” the letter read.

“If the concept of paying network access charges is to be accepted, the telcos should also pay the OTTs for all the above. Given the cost of the other infrastructure is far greater than the cost of the access network, it is quite likely that telcos may end up paying to the OTTs besides sharing their revenues with them,” the forum argued.

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