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Indian mobile operators call on government to make OTTs pay for traffic

SP Kochhar COAI.jpg

India’s mobile companies are calling on operators of so-called over-the-top (OTT) apps to pay them for carrying their traffic.

SP Kochhar (pictured), director general of the Cellular Operators Association of India (COAI), said the Indian government will earn more revenue from tax if the OTTs start compensating the operators.

Kochhar, a signals officer in the Indian army for 40 years until 2013, has been head of the COAI since 2020.

He said the government of India should clearly define communication services to remove any ambiguity on the concept. “The definition should be clear and futuristic when it comes to communications.”

According to reports, he said that OTTs should compensate the carriers for building networks “as they are the ones which use the infrastructure the most”.

The COAI also wants what it called “a light-touch licensing regime” for OTTs that provide communications services.

COAI has also submitted its suggestions to the Indian government’s Department of Telecommunications (DoT) as part of the consultations on a draft telecom bill.

The operators’ association calculated that the government’s income from telecoms operators would rise by 8 billion rupees (about US$100 million) if OTTs started paying telecoms operators.

The COAI said: “OTT communication service providers can pay directly to the telecom operators for use of their networks for providing their services in a fair and equitable manner by way of an equivalent of ‘interconnect charge’ (say network access charge) for the actual traffic carried by these OTTs on telecom networks, which can be easily measured.”

The association said: “Since the telecom service providers will be receiving the revenue from OTTs as part of their telecommunications services rendered, they would automatically be paying licence fee to the government.”

The COAI is also calling for compensation for internet shutdowns. “Internet shutdowns not only affect telcos’ ARPUs, but also the consumer base. Non-commercial infrastructure is also required to be set up by TSPs [telecoms service providers] in this regard, costing them. Reimbursement for the same to be considered by the government.”

Rudolf van der Berg, a Netherlands telecoms consultant, called the COAI’s proposals “a stunningly bad idea”.

He explained: “India around 2011 was the country that demonstrated why paying mobile termination rates for interconnection is a bad idea. It lowered them and calls skyrocketed. Meanwhile Pakistan raised the international termination rate and calls plummeted and fraud went up.”

Writing on LinkedIn he added: “When OTT has to pay how are smaller applications going to deal with that. An application for farmers to see the prices on the market? An application to stay in contact with a child working abroad? Traffic will tumble and it will be poor people and small apps that will suffer.”