Despite Telecoms’ Demands for Regulation, OTTs Insist the Current Legal Framework Is Adequate

Nitin Konde, Apoorva Bajj

Aug 21, 2024 — 3 min read

Despite Telecoms’ Demands for Regulation, OTTs Insist the Current Legal Framework Is Adequate

The telcos' proposal to control over-the-top (OTT) communication services like WhatsApp, Google's RCS, and Telegram has been met with resistance from these companies, who point to the Information Technology Act (2000) as the reason why applications are already subject to regulation.

The OTT industry's governing bodies have warned against regulating the applications in response to a consultation paper from the Telecom Regulatory Authority of India (TRAI) asking for opinions on service authorisations under the recently approved Telecommunications Act.

When it comes to the technical details, telecom service providers (TSPs) handle things on the network side, whilst over-the-top (OTT) providers handle things on the application layer. In its counter comments to the consultation paper, the Internet and Mobile Association of India (IAMAI) stated that there is a clear difference between OTT service providers and telecom service providers (TSPs) in terms of operational and technical aspects. IAMAI further added that OTT services are not covered by the telecom act.

Big Players Favouring the Telcos’ Proposal

After telecom giants Reliance Jio, Bharti Airtel, and Vodafone Idea demanded that Trai reform the current licencing system and introduce a pan-India single licence—a move that would include communication OTT players, who offer comparable services to carriers—the regulators have responded with counter comments.

Aside from mobile phone providers, the Broadband India Forum (BIF) argued that various services necessitate distinct terms and conditions, and that granting a single authorisation would be capricious and detrimental to the regulatory system.

If this were to happen, BIF argued, "It would essentially create a completely different category of 'Super Authorisation,'" which would have anti-competitive and unnecessary regulatory consequences for service providers that want to specialise in a certain field or offer a specialised service.

The trade group went on to say that this would lead to an increase in the concentration of wealth and power at the expense of the many who had hoped to reap the advantages of deregulation and growth in the market.

Asia Internet Coalition Also Against Telcos’ Pitch

The telecommunications companies' claims of a "level playing field" and "same service, same rules" are baseless, according to the Asia Internet Coalition (AIC), since the two services in question are essentially distinct. Broadband access is driven by subscriber demand for content, according to the trade body, while content is driven by the availability of broadband access.

Since OTT services are a major source of revenue for telcos, IAMAI made it clear that they do not get free access to TSP networks. The need for internet connection is being driven by the desire for online content and apps provided by over-the-top (OTT) providers, according to IAMAI. According to the report, the monthly average revenue per user for wireless service providers increased by about 90 percent, going from INR 74.38 to INR 141.14 between the years 2019 and 2022. This growth was a direct result of a 156-fold rise in data usage, which went from 92.4 million GB to 14.4 trillion GB between the years 2014 and 2022.