COAI, BIF clash over telcos’ revenue demands and OTT regulation

The ongoing debate over telecom companies’ demands for a “fair share” of revenue from Large Traffic Generators (LTGs) has intensified, with the Broadband India Forum (BIF) and the Cellular Operators Association of India (COAI) presenting sharply opposing views on the issue.

Rejecting the telcos’ call for revenue sharing with LTGs, such as streaming platforms and other internet-based services, the BIF argues that the demand is an anti-consumer tactic to mask telecom operators’ inefficiencies.

According to BIF, the traffic generated by LTGs is driven by consumer demand, and customers are already paying telecom companies for data services. Therefore, imposing additional costs on LTGs is unjustified and detrimental to consumers and competition.

BIF also challenged the telcos’ claims regarding stringent quality of service norms, which the Telecom Regulatory Authority of India has established. It contends that these norms are necessary to ensure a basic level of service for consumers and that the telcos’ argument of rising costs due to these regulations is unfounded. Instead, BIF suggests that the real issue lies in the telecom operators’ failure to optimise their existing resources.

Moreover, BIF criticised the demand for infrastructure cost-sharing, stating that LTGs were neither involved in network planning nor agreed to share infrastructure costs. BIF views this demand as an attempt by telcos to retroactively impose costs, which it deems illegal and contrary to the net neutrality principles enshrined in Indian law.

Commenting on the issue, T V Ramachandran, President of BIF, remarked: “Telcos’ proposal is a continued attempt to mislead customers and the public by creating untenable arguments for unacceptable quality and trying to impose additional financial burdens on other sectors while masking the inefficiencies and monopolistic behaviour within the telecom industry.”

He also warned that if telcos’ demands were met, it could disrupt the digital ecosystem and harm consumers by limiting access to essential services.

What do the telcos say?

The COAI, on the other hand, has expressed concerns over the characterisation of telecom service providers (TSPs) and Over-The-Top (OTT) platforms. COAI argues that the distinction between TSPs operating solely at the network layer and OTT platforms functioning exclusively at the application layer is misleading and fails to capture the technical reality of modern telecommunications.

COAI emphasised that TSPs operate across all seven layers of the Open Systems Interconnection (OSI) model, providing comprehensive end-to-end services, including at the application layer. In contrast, OTT platforms primarily operate at the application layer, relying on the infrastructure and services established by TSPs. It also argues that this layered approach is crucial for delivering robust and reliable digital services, particularly in the 4G and 5G eras.

In an earlier statement this week, Lt Gen Dr S P Kochhar, Director General of COAI, stated that OTT communication services should be included under Access Services authorisation within the new Telecom Act. He emphasised the need for a “same service, same rule” principle to ensure a level playing field between TSPs and OTT platforms, addressing what COAI sees as an imbalance in the regulatory framework.

As the debate unfolds, the clash between BIF and COAI highlights the complexities of regulating India’s rapidly evolving digital landscape. While BIF warns against the potential consumer harm and anti-competitive practices stemming from the telcos’ revenue demands, COAI underscores the need to recognise the full scope of TSP operations and ensure fair regulation of OTT services.

The outcome of this debate could significantly shape the future of India’s digital economy, with far-reaching implications for consumers, service providers, and the broader technology ecosystem.