The Cellular Operators Association of India (COAI) has put a strong foot forward on why the telcos must recover some form of revenue from the OTT (over-the-top) players. The OTT players rely on the good network services of the telecom operators to deliver a good experience to their users. For that, the telcos have to invest in the networks and the OTT players only focus on improving their platform experience. COAI has said that it is very much required for the OTT service providers to share a chunk of their revenues with the telecom players.
COAI pointed out that OTT service providers have two sources to earn money - a) advertisers and b) consumers. However, the money earned by the OTT players is not shared with the telcos who actually spend money on building the networks and carrying the traffic. Citing examples from other sectors, COAI said that telcos are at a serious disadvantage in the B2B area.
COAI 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."
The body further explained, "whenever a content provider like ZEE TV charges a subscriber, some amount of money thus collected is shared back with the network provider. Moreover, if the channel is a premium/HD one, a higher charge is imposed on the consumer by the CP, and accordingly a higher port charge is paid by the CP to the Network Provider."
Thus, COAI argued that anybody who invests money in creating the infrastructure is entitled to take usage charges from the one using the particular property or infrastructure for commercial purposes. OTT players offer HD streaming services and more due to which the traffic load on the networks of the mobile service providers gets heavy. To ensure seamless services, the telcos continuously invest in the networks but get a very low return from the consumers as the tariffs in India are pretty low.
COAI has requested the government to build a legal framework to ensure that large traffic generators pay a fair and proportionate share to the telcos for the services provided by them.