The Internet and Mobile Association of India (IAMAI) has vehemently opposed demands for revenue sharing between internet companies and telecom service providers (TSPs), terming them as rent-seeking measures.
IAMAI addressed concerns raised by the Cellular Operators Association of India (COAI) and the Indian Council for Research on International Economic Relations (ICRIER) in response to the Telecom Regulatory Authority of India’s (TRAI) consultation paper on “Regulatory Mechanism for Over-The-Top (OTT) Communication Services, and Selective Banning of OTT Services.”
COAI’s proposal for a ‘fair share charge’ and ICRIER’s suggestion of a ‘Broadband Infrastructure Levy’ were both criticized by IAMAI. The association argued that these proposals overlook the fact that consumers already pay for data usage, making an additional charge unjustifiable.
The IAMAI contended that imposing fees on OTT service providers for data used by consumers would essentially be charging twice for the same service, as consumers already purchase data from telecom companies. The strain on telecom infrastructure occurs when data is sold to consumers beyond the infrastructural capacity, an aspect often overlooked in these proposals.
Furthermore, IAMAI opposed the idea of subjecting OTT service providers to regulations meant for traditional telecom companies. The association emphasized that the special regulatory and licensing regime imposed on telecom service providers, due to their control over valuable national resources like spectrum, doesn’t apply to OTT service providers. Implementing a similar regulatory regime for OTT providers would amount to unnecessary over-regulation.
Over-the-top service providers have contributed significantly to the growth of data consumption and economic activity in India by offering high-quality content at little to no cost to users. IAMAI stressed that mandating revenue-sharing mechanisms could stifle this growth and deter startups by setting volume-based revenue sharing as a glass ceiling, hindering their ability to expand. The association advocated for measures that protect the growth and innovation within the OTT industry.
