09 January 2024
The Cellular Operators Association of India (COAI) has issued a new white paper calling on OTT players who generate huge amounts of traffic to share network upgrade costs with Indian telcos to make the telecoms industry more sustainable..png?lu=371)
The paper looks at capex and data traffic in India between 2014-2023 to demonstrate the impact of LTG traffic on networks, and analyses five possible models for resolving the problem; but ultimately concludes that the most sustainable model is one where OTT players share infrastructure costs.
The paper also cites a study conducted by Analysys Mason (and commissioned by COAI) which estimates Indian telcos will spend up to $75 billion on 5G networks alone until 2035.
COAI director general Lt. Gen. Dr. S P Kochhar said in a statement that OTT players – described in the paper as large traffic generators (LTGs) – pay no direct fees for using telecoms infrastructure whilst eating up a considerable amount of bandwidth.
“This disparity hinders the operators' ability to invest in network upgrades and expansion such as launch of 5G services in India – ultimately impacting service quality for consumers,” said Kochhar. This also gives OTT players an unfair advantage as they make money from both end users and advertisers, while telcos mainly have the former as a revenue generator, he added.
Kochhar said further it’s unrealistic and unfair for OTT players to argue that telcos can simply raise end-user prices to make up the cost increase.
The COAI white paper is the latest step in a long-running debate between telcos and OTT players about who should shoulder the cost of LTG traffic.
However, the Broadband India Forum (BIF) – which represents Big Tech companies like Amazon, Google, Meta, and Microsoft – has long argued that it’s unfair for OTTs to pay for network rollouts when they have no say in how much telcos spend on spectrum and equipment. The BIF argues that telcos do earn money from all that extra traffic and if anything should be sharing that revenue with OTTs.
