Content abstracted from public submission of Nasscom:
OTTs should appropriately be referred as Internet Platforms and Services in line with the terminology and understanding of computer technologists.
The term “OTT” does not acknowledge the innovation in Internet platforms and services at the application layer, their variety of services and product offering. Instead the term and its usage imply that they are simply methods of serving.
This is limiting and Nasscom has advised that in India, OTTs should appropriately be referred as Internet Platforms and Services in line with the terminology and understanding of computer technologists.
Further, the belief that it is Internet platforms and apps that ride over the top of telecom networks is misplaced. It is consumers who use telecom networks to access apps and internet platforms. These consumers have contracts with telecom companies and they are using bandwidth that they have paid for at a price that generates profit for telecom companies.
In fact, it is these Internet platforms and apps that make it worthwhile for consumers to use the Internet and therefore pay telecom companies for data packs.
As products and services evolve in the extremely dynamic technology environment, there is a need to recognize the developments and safeguard fundamental rights of citizens. The Information Technology Act is mandated to ensure this.
Therefore, there is no need for any additional regulations for content and services on the Internet. In fact, it would be detrimental to have licensing for communication apps and Internet platforms. There are an estimated 1.5 million apps worldwide and several times more Internet platforms.
There is no basis for differentiating between communications services and internet platforms offering communication services and other services. Very many apps incorporate communication as a part of their offering. For example, a classified site or app may offer the buyer a feature of sending a message to the seller and even though communication is not the primary purpose of the app, it is an integral part.
The apps created have made Internet more useful, and opened up avenues for not just service providers, but increase convenience, transparency and enabled newer services for consumers. This is driving data revenues for Telecom Companies. It is also important to note the preferences of the user and the reason for migration to Internet Platforms and Services.
It is unlikely that people prefer to use Internet Platforms and Services because they are on the Internet. Instead, the preference arises out of convenience, lower cost and comparable if not better experience. Further increased usage of data also translates into revenue stream for Telecom Companies although not under the traditional revenue stream.
With an expanding revenue stream from data usage, the overall impact is seen to be positive, and does not require any correction.
The main issue in the TRAI consultation paper in this context is that with TSPs moving from a voice-dominated to a data dominated era there are associated pressures arising from the current business model, which has dominant revenues from voice, which is relatively low in terms of data intensity. Over time, as mobile penetration reaches saturation levels voice traffic will plateau and data traffic will constitute the bulk of growth in demand and therefore source of revenue for telecom infrastructure.
With data traffic likely to become the driver of demand it is evident that the existing misalignment between sources of revenue and drivers of demand for telecommunication services is unsustainable. The sooner it is removed and the demand driver and revenue streams are synergized, the faster will be the migration to a more sustainable and future-proof telecommunications eco-system in the country.
Therefore, addressing the misalignment between sources of revenue and drivers of demand will resolve apparent difficulties of achieving rapid proliferation of telecom infrastructure without creating barriers for rapid adoption of internet-enabled and/or innovative models thereby potentially nullifying possible gains from migration to a digital, connected India.
In the long run, therefore migration to a revenue stream calibrated to the demand/consumption of data is the only solu tion, where Internet Platforms and Applications spur demand for data that in turn generates revenues for TSPs, leading to a synergistic eco-system.
Besides, loss of revenue arguments from TSPs are not evident in some of the recent quarterly results announced. Based on the current telecom industry “results” and, growth trends this migration is neither needed instantly, nor is an imperative. Migration of revenue stream to the demand/consumption of data can happen over a period of time and it is for the TSPs and the regulator to evolve the most appropriate path and timelines for such migration.
Nasscom is of the firm view that the Internet Platforms and Applications need not be dragged into this equation. Further, Telecom Service Providers offer bandwidth to users. The Government has promised minimum government and digital access to all. If evolving Internet Platforms and Services are curbed at this juncture it will be tantamount to work-ing against the public interest.
Apps should be allowed to maintain their current model of a direct relationship with their user, as the Internet Platforms and Services promise to enhance user experience on the Internet and offer most cost effective and better service models.
There are several initiatives being developed across Government Departments that encourage Internet driven products and services, both for domestic and global markets.
Enabling environment that offer incentives for setting up and operating from India, world class infrastructure and push for technology adoption are key.
Nasscom is working with several Departments in the Government on this, and TRAI has a critical role as a regulator to ensure no artificial and market distorting regulations are introduced in India by ensuring Net remains Neutral, open, preventing any price or non-price based discriminat ion.
A level-playing field must be ensured to give the new and emerging companies a fair opportunity to compete and succeed. A lot of innovation is happening in the country today. As per the recent Nasscom report, Indian start-ups with their unique solutions are witnessing increased traction in global whitespace opportunities such as Internet of Things, aug-mented realty, smart hardware, BI and many more.
With technology spreading its wings into different domains, ‘Domain+ Tech’ solutions are taking over other trends. The emerging niche technology solutions are primarily focused on Ad-tech, Edu-tech, Health-tech, Agri-tech and many more.
There are several trends that signal increasing maturity in the ecosystem, – Multiple and accessible platform like VC/PE, angel investors, incubators, financial institutes and even banks, are the driving force for the same.
In fact, during 2010-2014 timeframe close to $3 billion is expected to be invested in Indian start-ups.
There is absolutely no need from a logical point of view and no practicability from a technology point of view of bringing in the type of regulations/controls on Internet platforms and Applications* and limit the scope and potential of the eco-system.
With data traffic likely to become the driver of demand it is evident that the existing misalignment between sources of revenue and drivers of demand for telecommunication services is unsustainable.