Telcos renew their demand for OTT regulation, revenue share pact

With the new telecom minister, Jyotiraditya Scindia taking charge, telecom operators have once again put forward their demand that over-the-top players share their revenues with them because of a large quantum of data, especially video, which they consume. They have also reiterated their demand for bringing OTTs under a regulatory framework, similar to the one which applies to telcos.

The operators, through the Cellular Operators Association of India (COAI), have urged the new minister to implement a fair share data network usage policy. According to telcos, such a policy would ensure that the large traffic generators pay a share of their revenue to telcos that provide the complete infrastructure for their data requirements.

Ashwini Vaishnaw, who was also the communications minister in the Modi 2.0 government had said that OTT regulations will not come under the ambit of Telecom Act and the same will be examined by ministry of electronics and information technology (MeitY). Vaishnaw continues to be the IT minister in the new government.

“The rapid surge in data over telecom networks has put tremendous pressure on telecom networks, leading to severe quality of service (QoS) issues, drastically impacting telecom operators’ customer experience,” said SP Kocchar, director general of COAI.

According to Kochhar, even as these large OTT apps do not contribute anything to the infrastructure but they earn revenue in the form of subscription fee and advertisements which are transferred to their parent countries.

“This causes huge loss, estimated to the tune of Rs 10,000 crore, to the government,” Kochhar said, adding that the same is expected to increase further, especially with the emergence of newer AI applications and technologies.

Besides the issue of fair share from OTTs, telecom operators want the new government to address issues around spectrum pricing and related revenue concerns. They have urged the Telecom Regulatory Authority of India (Trai) to revisit spectrum pricing recommendation and do away with the minimum rollout obligations, giving telcos the freedom to decide the rollout strategy upon acquiring the spectrum.

This is because India’s spectrum costs as a proportion of annual recurring telecom revenues are much higher than key global markets such as China, Germany, UK, Brazil or even neighbouring Pakistan, COAI said, citing a report by CLSA. On the other hand, average revenue per user (Arpu) of telecom operators is among the lowest in the world.

In its recent communication to Trai, COAI pitched for a policy on spectrum for its efficient management and allocation. The association has asked for at least 10-year auction schedule with spectrum availability.

Among other key things, the telecom operators want DoT to resolve issues around the 6 GHz band and allocate the same to telcos, as the band is essential to expand 5G services.

Officials, however, said resolution of issue around allocation of 6GHz band will take time as the government is also currently studying the requirement of the band for Wi-Fi services. Besides, 6GHz spectrum is currently being used by the Indian Space Research Organization (ISRO).

In their recommendation, the telcos have also urged the government to increase the number of test labs to support the testing of a massive volume of equipments. They have also sought exemption on customs duties for products that enter India for testing and certification temporarily.

COAI has also urged the government to take strict actions in a bid to curb telecom equipment theft. Financial Express