In a letter to the Ministry of Finance, the Cellular Operators Association of India (COAI) has informed that the telecom operators have spent an additional Rs 100 billion in capital expenditure (capex) since March 2022 to enhance network infrastructure needed to support traffic from four-five over the top (OTT) service providers.
According to COAI, the additional capex should be borne by the large traffic generator (LTG) OTTs as a proposed fair-share charge (FSC). The FSC is necessary for the development and upkeep of telecom networks across the country, as colossal traffic is being loaded on the networks by OTTs as data demand grows. Moreover, COAI has repeated its argument that with OTTs not compensating telcos, the government is also losing out on tax revenues.
COAI further added that a FSC paid by OTTs to telcos would increase the latter’s earnings, and would have enabled them to pay additional tax worth Rs. 8 billion in 2023 under the existing 8 per cent overall tax rate for operators.
