OTT players must pay telcos for using their network: COAI to govt

The Cellular Operators Association of India (COAI) has demanded that over-the-top (OTT) players must pay for using the telecom networks to stream their content and the “usage charge” shall be decided mutually between telcos and OTT players, according to media reports.

“Any entity which creates a property or infrastructure by investing funds, is entitled to take usage charges (rent or lease charges, etc) from the user of that property or infrastructure who uses the same for commercial purposes,” mentioned one of the reports quoting the COAI letter written to telecom secretary K Rajaraman, as saying. 

A demand for legislation on OTT players is growing globally and the EU is working on legislation in this regard, COAI told the government to make its point. 

COAI in the letter also seeks a legal framework to enable the service providers to charge any user that uses their services. 

"If a mutual agreement is not reached, then an appropriate licensing and regulatory framework should be in place which governs the contribution of OTT players towards creation of network infrastructure," the letter reportedly stated.

COAI on November 22 had stated that OTT players must directly compensate telcos for data traffic they are driving onto the networks. It also sought a licensing and light-touch regulatory framework for such services.

The OTT segment has grown exponentially over the past two years which has prompted the government to bring them under their purview. The draft Telecommunication Bill 2022 has included OTT as part of the telecommunication service. 

Stakeholders like the Internet and Mobile Association of India (IAMAI) the Bill. IAMAI, in its letter to the telecom department, expressed grave concern about the impact of these changes on India's startup ecosystem and the digital economy.

The industry body said that by regulating carriage and content separately, India has enabled the growth of both OTT service providers as well as traditional telecommunication service providers, which is reflected in the digital economy generating over USD 200 billion of economic value each year.

"Creating room for licensing provisions applicable to over-the-top service providers presents an existential threat to India's start-up ecosystem by creating herculean barriers to entry...but also would mean that foreign investors bullish on Indian start-ups may experience a chilling effect, owing to the drastic policy uncertainty," IAMAI had said in a statement.

OTT Industry in India

According to a report published by Media Partners Asia (MPA), the Indian OTT streaming video market is currently in its second growth phase with total revenues of $3 billion in 2022. 

With over 40-odd players offering original content in all languages, the industry is expanding quickly and consistently. There are currently over 45 million OTT subscribers in India. This figure is expected to reach 50 million by the end of 2023.