War between OTT and telecom companies drives COAI to track data use

The Cellular Operators Association of India (COAI) has requested leading Indian telcos, including Reliance Jio, Bharti Airtel and Vodafone Idea, to provide granular data on the amount of bandwidth on their networks consumed by the big four users — Alphabet, Amazon, Meta and Netflix.
 

Confirming the move, S P Kochar, director general of COAI, said that the aim is to put the information in  public domain for all stakeholders and also for the government.
 

COAI’s ballpark assessment, based on feedback from their members, is that a staggering 70-80 per cent of the bandwidth on their networks is consumed by these four users.
 

The association has been demanding that OTTs (over-the-top players) should provide a share of their revenues to the telcos for using their telecom network. It points out that there is a global precedent for this in South Korea, and discussions on this are also ongoing in the European Union.
 

In South Korea, S K Broadband and Netflix, which fought a bitter battle in the courts on network-related streaming costs, have now come to a settlement, though its financial terms have not been revealed. Earlier this year the European Commission started gathering views about a mechanism for a fair contribution from big data users to network costs.

 

According to US-based network intelligence company Sandvine, more than 57 per cent of data traffic in 2021 was attributable to Google, Netflix, Apple, Facebook, Amazon and Microsoft, compared to 33 per cent in 2019. YouTube topped the chart, followed by Facebook and Netflix in 2021.  
 

The Telecom Regulatory Authority of India (TRAI) came out with a consultation paper in July titled “ Regulatory Mechanism for OTT communications services and selective banning of OTT services”. It had asked stakeholders to comment on the paper.
 

Making a strong case, the COAI had stated in its response that OTT services have led to an erosion of revenues for the telcos. It pointed out that while telecom service providers make high capital investments to keep up with the growing data traffic, OTTs have diminished traditional revenue sources. Hence the a demand for a policy framework to enable a fair contribution from large OTT service providers to telecom network operators.
 

Refuting big tech’s contention that the move by telcos is a violation of “net neutrality”, the COAI said that asking for a fair share of revenues does not violate net neutrality or hamper innovation. That is also why it is not asking all OTTs for a revenue share, but only the large traffic generators who have disproportionately high tariffs. So exemptions can be made to MSMEs, startups, small entrepreneurs, amongst others.
 

However, Sanjay Gupta, country head and vice-president, Google India, in an interview yesterday said that the issue was a commercial arrangement between two parties. He said that just as a consumer pays for data which goes to telcos, they also pay for content which goes to the OTT platform, and both make money.