"We are asking for a fair share for setting up, maintaining and running networks": COAI DG

The telcos, who really invest money on constructing the networks and delivering the traffic, do not receive a percentage of the revenue generated by the OTT operators.

The Cellular Operators Association of India (COAI) has made a compelling case for why the telcos need to recoup some money from the OTT (over-the-top) operators. To give its users a decent experience, OTT players rely on the telecom operators' reliable network services. To do this, telcos must spend in their networks, whereas OTT players just seek to enhance their platforms' user interfaces. According to COAI, it is imperative that the telecom players share a portion of the earnings generated by the OTT service providers.

On Thursday, the industry's stakeholders urged the government to establish a legal framework to ensure that over-the-top (OTT) players who generate significant amounts of traffic pay telecom and mobile service providers a fair and proportionate share for the services they offer. They added that the telcos' demand for a reasonable "usage charge" from OTT providers is reasonable and fair.

"While telcos carry their traffic of voice and data, majority of the use of these networks is done by OTT players who load these networks with massive amounts of data which they carry to the end users. "They get it from content providers, put it on their platform and deliver it to the end users without paying anything to the network providers who have created the network for them to roll on," COAI Director General S P Kochhar said.

OTT platforms with a sizable user base in India include Netflix, Amazon Prime, Zee5, and SonyLIV. He claimed that the adoption of cutting-edge technology like 5G is advantageous for over-the-top platforms. Due to the significant expenditure that telcos have committed to bring out 5G networks, he continued, they are in financial difficulties. "We are asking for a fair share for setting up, maintaining and running these networks," Kochhar added.

The COAI emphasised that OTT service providers can make money from both customers and marketers. The telcos, who really invest money on constructing the networks and delivering the traffic, do not receive a percentage of the revenue generated by the OTT operators. COAI claimed that telcos are at a significant disadvantage in the B2B space, citing instances from other industries.

Kochhar said, "In broadcasting, the Content Providers (CP) who earn from subscription as well as advertising, share a part of their subscription revenues as port charges with the Network Service Providers – who also earn from the subscribers for carrying the service to their homes/devices."

Explaining further he continued, when a content provider, such as ZEE TV, charges a subscriber, a portion of the money that is earned is sent back to the network provider. In addition, if a channel is premium or HD, the CP will charge the consumer more and will pay the Network Provider a higher port fee as a result.

In light of this, COAI contended that anyone who spends money in building infrastructure has the right to collect usage fees from parties utilising a specific property or infrastructure for profit. OTT players provide HD streaming services and more, which causes a significant increase in network traffic on mobile service providers. As a result of India's relatively cheap prices, telcos continually invest in their networks to maintain smooth services, yet they only receive a very small return from customers.

The COAI has asked the government to create a regulatory framework to make sure that significant traffic producers pay the telecoms a fair and proportionate share for the services they deliver.