The ongoing debate surrounding revenue sharing between Over-The-Top (OTT) players and Telecom Service Providers (TSPs) has garnered attention from the Internet and Mobile Association of India (IAMAI), which has expressed concerns that such a model could potentially violate the principles of net neutrality. The Telecom Regulatory Authority of India (TRAI) recently introduced a consultation paper titled “Regulatory Mechanism for Over-The-Top (OTT) Communication Services, and Selective Banning of OTT Services,” sparking discussions within the industry regarding the need to regulate OTT services and explore revenue-sharing arrangements.
Background of the Issue
At the heart of the matter lies the contention that OTT players benefit from the infrastructure developed by TSPs, who have invested significant resources in building and maintaining the network infrastructure. This has led some to argue that TSPs should be entitled to a share of the revenue generated by OTT players. Historically, this revenue-sharing model has not been in place in India since the inception of the internet.
However, the landscape has evolved, with the growing popularity of OTT services placing increased demands on TSP networks. TSPs argue that they must invest further in expanding network capacity to accommodate this traffic. They contend that while OTT communication players like Telegram and WhatsApp offer voice and video calling services, as well as texting, on their networks without facing extensive government regulations, TSPs providing similar services must adhere to strict regulatory norms and financial obligations.
In response to these demands, TSPs have called for regulatory oversight of OTT players and a share of their revenues, claiming it is a matter of fairness and a means of recuperating the costs incurred due to increased network traffic.
IAMAI’s Perspective
IAMAI, however, holds a different viewpoint. In response to TRAI’s consultation paper, IAMAI argued, “Such demands are based on the erroneous notion that OTT service providers consume bandwidth, and disregard the fact that not OTT players but consumers themselves independently transact and purchase data from TSPs.”
The association further highlighted that implementing revenue-sharing mechanisms would essentially result in double charging for the same service. Consumers already pay TSPs for the data they consume, and additional revenue from OTT players would be unjustifiable. IAMAI emphasized that the amount of data consumed and the resulting pressure on TSP infrastructure are directly linked to the volume of data sold by telecom companies to consumers.
Net Neutrality Concerns
One of the most significant concerns raised by IAMAI is the potential violation of net neutrality principles established by the Ministry of Communications in 2018. Implementing revenue-sharing mechanisms could introduce additional costs for accessing free or low-cost content, which may eventually be transferred to consumers, thereby increasing the cost of internet usage.
In conclusion, while the debate between OTT players and TSPs regarding revenue sharing continues, IAMAI’s position underscores the importance of upholding net neutrality principles and avoiding any measures that could negatively impact consumers or disrupt the open nature of the internet. Striking a balance between fair compensation for infrastructure investments and safeguarding net neutrality remains a complex challenge for regulators and industry stakeholders alike.
