COAI Responds to IAMAI, Asserting the Justifiability of Telcos’ Request for ‘Usage Charge’ from OTTs

The Cellular Operators’ Association of India (COAI) has defended its position on the demand for reasonable “usage charges” from Over-The-Top (OTT) communication service providers, stating that it is a reasonable and justifiable request. According to COAI, this demand would help in the development of the country’s digital infrastructure and contribute to the economy.

COAI has accused parties with vested interests of misdirecting the issue of the need for a regulatory framework for communication OTTs and usage charges by misleadingly introducing the issue of net neutrality to make it a populist issue. Lt Gen Dr SP Kochhar, Director General of COAI, did not name the Internet and Mobile Association of India (IAMAI), which had previously criticized the demand for revenue sharing by telecom service providers (TSPs).

The Cellular Operators Association of India (COAI) has commented that there appears to be a lack of understanding regarding the essence of net neutrality, which is about providing fair and equal treatment to all online content without any discrimination. The issue of usage fees is not connected to this concept.

According to the COAI, telecom service providers are committed to adhering to net neutrality principles as stipulated in their license conditions, as well as other regulatory and security requirements, which aim to protect consumers’ interests and security. On the other hand, over-the-top (OTT) services presently do not have to comply with such regulations.

The COAI has been advocating for a “sending party network pays” (SPNP) model, which would permit telecom service providers to monetize internet-based businesses by instituting rent-seeking measures.

Last week, the Internet and Mobile Association of India (IAMAI) stated that the sending party network pays (SPNP) model would be detrimental to the digital economy and the creative ecosystem it supports. Despite this, calls for the SPNP model have resurfaced, even though the demand for telecom services is dependent on the ability of over-the-top (OTT) services to attract users.

According to the Cellular Operators Association of India (COAI), Over-The-Top (OTT) platforms utilize the networks provided by telecom service providers without any contribution towards the costs associated with their establishment, operation, maintenance, and expansion. The COAI has further emphasized that many players in the OTT communication industry charge subscribers substantial fees for verified accounts, resulting in additional revenue generation.

In essence, the COAI has raised concerns regarding the lack of financial participation from OTT platforms in the creation, maintenance, and enhancement of the telecommunication infrastructure that they rely upon. The association has also pointed out that certain OTT communication players are generating additional revenue streams by imposing significant fees on their subscribers for verified accounts.

Kochhar, an industry observer, has commented that it is ironic that representatives of entities that profit by levying charges on subscribers while using telecom service providers’ networks for free are claiming that paying for usage would increase costs for users.