COAI Calls for OTT Platforms to Share Costs for Traffic Growth

The Cellular Operators Association of India (COAI) has proposed that large traffic-generating (LTG) platforms, such as over-the-top (OTT) service providers, should bear an equitable share of the costs associated with the disproportionate traffic growth on telecom networks. COAI argues that the current model, where telcos shoulder the full burden of network costs, is neither sustainable nor prudent.

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Startups and MSMEs Exempted

COAI noted that startups and micro, small, and medium enterprises (MSMEs) need not come under the fair share model, as their share of contribution to the overall traffic is small compared to LTG platforms. The industry body proposed various models and approaches to address the issue, which has become a flashpoint between OTTs and telcos.

Equitable Share Model

COAI believes that the best solution is for an equitable share of the costs to be borne by the 4-5 LTGs responsible for the disproportionate traffic growth. Such a model would also safeguard the interests of startups and MSMEs, it said. After analyzing and formulating five models of resolution, COAI concluded that model 5 is best suited to address the rising infrastructure costs driven by accelerated data usage due to LTG traffic.

TSPs' Burden

COAI emphasized that putting the entire burden on telecom service providers (TSPs) is neither sustainable nor prudent. The association advocated for a model where 4-5 LTGs causing disproportionate traffic growth can shoulder a fair share of network costs. COAI asserted that this option is feasible and addresses concerns related to net neutrality, double dipping, and others.

Global Debate

COAI highlighted that a worldwide debate is ongoing on whether LTG platforms, including OTT service providers, should contribute towards the associated network costs. The industry body pointed out that LTGs put a disproportionate amount of data traffic on the networks and enjoy the benefits of telecom infrastructure built and maintained by operators for gaining profits, giving rise to this debate.

Impact on Service Quality

COAI expressed concern that the current disparity hinders the operators' ability to invest in network upgrades and expansion, such as the launch of 5G services in India. This ultimately impacts service quality for consumers. With the fast-evolving trend of digital convergence across sectors, especially with 5G, and the aspirations for the future 6G, COAI anticipates even more bandwidth-heavy applications and services to emerge in the future.

Need for Fair-Share Mechanism

COAI emphasized the need for a fair-share mechanism that ensures equitable contributions from the entities benefitting from the burgeoning app economy. The association believes that such a mechanism is essential to ensure the sustainability of the telecom sector and to enable continued investment in network infrastructure.

Conclusion

COAI's proposal to have LTG platforms bear an equitable share of telecom network costs has sparked a significant debate in the industry. While OTTs argue that they already contribute to the ecosystem through taxes and investments, telcos maintain that the disproportionate traffic growth caused by LTGs is straining their networks and resources. Finding a fair and sustainable solution that balances the interests of all stakeholders will be crucial for the future growth and development of the digital economy in India.