India should take the lead in formulating rules and regulations for over-the-top (OTT) players rather than following any global benchmark, according to the Cellular Operators Association of India’s (COAI) press note on the consultation paper on “Regulatory Mechanism for OTT Communication Services, and Selective Banning of OTT Services.”
According to Lt. Gen. Dr. S. P. Kochhar, director general (DG), COAI, telecom service providers (TSPs) have been the harbingers as telcos have been carrying the massive investment burden for deploying networks and delivering connectivity across the country entirely by themselves. On the other hand, 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. Moreover, OTTs have led to increased demand for data services/bandwidth, with nominal average revenue per user (ARPUs).
However, he added, the focus of the TSPs would now be on networks, applications, and innovative services which include OTTs. A collaborative effort needs to be made responsibly by all stakeholders involved, to ensure sustainability and advancement of the continued incredible journey of India’s technological growth. Kochhar further emphasised that support is required for the telcos where a collaborative effort needs to be made responsibly by all stakeholders involved, to ensure sustainability and advancement.
Earlier, one of the models was proposed by the telecom industry to facilitate revenue-sharing mechanism between OTTs and telcos. The rationale and justification for fair share contribution from OTTs is in terms of business-to-business (B2B). The TSPs are bearing the cost of carrying the humongous amount of content developed while being paid nothing for the same. However, OTT service providers have twin sources of generating their revenue including, advertisers and consumers, and the OTT players do not share back anything with the TSPs on whose networks they ride, Kochhar added.
Thus, there is a need for the government to provide a legal framework that ensures that large traffic generators pay a fair and proportionate share to mobile network operators (MNOs) for the services provided by them, to incentivise them to deliver the traffic in a more efficient way and to ensure the economic sustainability of network deployments.
According to the Indian Council for Research on International Economic Relations (ICRIER), there is a need for OTTs to contribute towards the network costs of the telcos and OTT service providers cannot continue to ride for free. This will lead to consumers reaping the benefits of OTT content.
As a result of this, the last mile coverage can be enhanced by the TSPs from the revenue generated covering both Universal Service Obligation Fund (USOF) and commercial areas, besides enhancing connectivity quality and reach. Additionally, COAI has also proposed that such smaller players with low usage need not be required to pay the usage charge. In this way, innovation and entrepreneurship would not get affected.