Select OTTs and large operators should pay up for 'disproportionate' telecom traffic: COAI

More data, more responsibility: Select Over the Top (OTT) platforms and large streaming platforms should pay up for the disproportionate rise in telecom traffic since 2019, the Cellular Operators Association of India (COAI) has submitted in a whitepaper.

Outlining concerns of the telecom industry, which have been voiced by the telecom body from time to time, the Association sent a 16-page document with analysis and recommendations to the government.

Republic Business has seen a copy of the whitepaper.

Peaking costs

As per the data, the capex requirements on telecom service providers was Rs 26,341 crore which shot up to Rs 88,423 crores as data consumption increased owing to the introduction of 4G services, increased affordability of data prices and the advent of OTT applications.

Even as investments dipped in March 2021, likely due to the world opening up post-pandemic, March 2023 figures for capital requirements for stable services is Rs 73,922 crore as per COAI data.

Who's responsible?

The most workable recommendation of COAI, as per the whitepaper, entails the biggest players to bear costs instead of subscribers or providers alone.

“The best solution is for an equitable share of these costs to be borne by the 4-5 LTGs responsible for the disproportionate traffic growth (since 2019),” COAI asserted.

This approach accommodates the interests of Startups, MSMEs and other smaller players, and  addresses all concerns of various parties – i.e., net neutrality, double dipping and others, COAI added.

This hints at the inclusion of Google for YouTube and Meta platforms - Facebook, Instagram which entail heavy streaming volumes.

The Debate

SP Kochhar, Director General of COAI said the debate on Large Traffic Generating (LTG) platforms paying up for utilising telecom infrastructure is prevalent in India as well as across the world.

These platforms include streaming platforms like Netflix and Amazon Prime, since they consume mobile data or megabytes and gigabytes-worth of Wifi and broadband services of telecom providers.

“LTG platforms and applications - which put a disproportionate amount of data traffic on the networks - should contribute towards the associated network costs, is a prevalent topic across the world today, including India.”

While these LTGs consume a significant portion of internet bandwidth, leading to increased network costs for operators, they currently pay no direct fees for utilising this infrastructure, Kocchar said. He had equated this phenomenon to someone using domestic rental arrangements for enterprise gains.

“This disparity hinders the operators' ability to invest in network upgrades and expansion such as launch of 5G services in India - ultimately impacting service quality for consumers,” he added.

Telecom today

Notably, Indian telecom operators Jio, Airtel and VI are in fierce price competition for consumer acquisition. Even as Vodafone Idea, formed after the merger of the British telecom network and Aditya Birla Group’s telecom arm slashed postpaid prices and partnered with Amazon Prime, it has lost 7 lakh users to Airtel and Jio as per TRAI data.

Kocchar said that against the “misconceived suggestions by the LTG advocates to the Telecom Service Providers (TSPs) to raise consumer tariffs to recover the network expenses for the sector's sustainability,” the telcos have adopted a consumer-centric approach which does not burden the end-user for using applications and services that consume higher volumes of data.

The White Paper, which tabulates Capex and data traffic from 2014 till 2023, has been the basis for COAI formulating the 5 resolution models, out of which two were marked workable.