Knives out between COAI & BIF over OTT-telcos payment as govt keeps mum

New Delhi: The Cellular Operators Association of India (COAI) on Thursday took on the Broadband India Forum (BIF), saying over-the-top (OTT) players are ‘free riding’ on the telecom service providers’ (TSPs) networks while using the TSPs’ consumer base for monetising their services, earning massive profits/benefits.

The industry body BIF on Wednesday shot off a letter to the Department of Telecommunications (DoT), saying that if the concept of paying network access charges is to be accepted, the telcos should also pay the OTT platforms.

“This is as ludicrous a suggestion as can be imagined. 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 COAI argued.

“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 added.

The COAI said that besides cannibalising the services of the telecom operators, OTTs consume humongous bandwidth, which stresses the telcos’ networks and necessitates their continuous and speedy upgradation and development.

Amid the COAI-BIF tug-of-war, the government is silent over who should pay whom.

According to the COAI, TSPs 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,” argued the COAI.

Hence, the definition of OTT communication services need to be clearly incorporated in the Telecommunication Act itself, it added.

“Keeping in mind the need to nurture startups and MSMEs in the OTT ecosystem, COAI has also suggested that such players with low usage need not be required to pay the usage charge, so as to aid their growth. So, innovation and entrepreneurship would not get affected,” said the industry body.

In its letter addressed to K. Rajaraman, Secretary, DoT, and Chairman, DCC, the BIF had 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.


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