IAMAI opposes demands to share revenue, pay compensation to telcos

The Internet & Mobile Association of India (IAMAI) has opposed Cellular Operators Association of India's (COAI) demand that internet platforms compensate and share revenues with telecom operators calling it “a covert attempt to dilute net neutrality in India”.

COAI has been advocating for a model where online platforms are made to pay ‘usage charges’ to telecom operators. The body had earlier said that over-the-top (OTT) apps should compensate telecom companies for rolling out networks as they are the ones who utilise the infrastructure the most.

In November 2022, COAI wrote to the Department of Telecommunications (DoT) demanding that OTT communication platforms – the likes of WhatsApp, Google Meet, Telegram, and Signal – be made to pay ‘usage charges’ to telecom operators. The association also wants that communication should be brought under a light-touch licensing regime in the draft Telecom Bill.

IAMAI, in a statement released on Thursday, said the model where sending party network pays (SPNP) would sound the “death knell” for the digital economy and the creative ecosystem which it sustains. According to the IAMAI, the growth of internet businesses has promoted internet adoption, economic activity, and added value to the data package products sold by telecom service providers.

“Calls for an SPNP mechanism have re-emerged even though the demand for telecom services is entirely dependent on the ability of OTT services to attract users. Levying additional cost on OTTs, without providing any additional services, would be akin to exacting tribute,” the body of internet companies said.

It added that such revenue sharing would also have a chilling effect on investment and entrepreneurship in an emerging sector, where businesses typically take a few years to monetise.

IAMAI represents over 450 companies from sectors like social media, digital advertising, digital entertainment, traveltech, online gaming, digital payments, fintech digital commerce, edutech, healthtech, agritech, blockchain, big data, etc.

The body further said OTT service providers have flourished in India’s current regulatory regime as they were empowered to distribute high-quality content for little to no cost to users. “Given that India’s internet success has been hugely dependent on affordable access to data, instilling an SPNP mechanism would effectively raise costs for users, albeit indirectly, and have the same impact as raising the cost of data itself.”

It added that the SPNP model would result in no meaningful growth in the revenue of telecom service providers, despite the massive price paid by the digital economy. “A higher cost associated with internet usage would lower overall revenues of internet businesses and may even reduce the amount of data a consumer would use," it said.