Telcos push for 'fair share' fee from OTTs; urge DoT to levy USO-like levy on platforms

Indian telecom operators, including Reliance Jio, Bharti Airtel, and Vodafone Idea, have reportedly proposed to the Department of Telecommunications (DoT) that large over-the-top (OTT) platforms, such as Netflix, WhatsApp, Amazon Prime, Facebook, Instagram, and Zoom, should contribute to network infrastructure costs.

They suggest implementing a levy similar to the Universal Service Obligation (USO) fee. Telecos have collectively proposed to the DoT that a levy be imposed on such OTTs’ income generated from India. That levy could get pooled into the Consolidated Fund of India or the Digital Nidhi Fund, according to Business Standard.

The OTTs were also urged to pay corporation tax as well as GST to the Indian government.

It is to be noted the Cellular Operators Association of India (COAI) argues that these large traffic generators (LTGs) consume significant bandwidth, necessitating continuous network upgrades and capacity enhancements. Despite this, OTT platforms currently do not contribute to the expenses incurred by telecom service providers (TSPs) for maintaining and expanding network infrastructure.

COAI maintains that implementing a fair share fee would not violate net neutrality principles. They assert that such a fee would enhance customer satisfaction by enabling better network quality and improved services.

However, industry bodies like the Internet and Mobile Association of India (IAMAI) and the Broadband India Forum (BIF) have oppose this proposal in the past. They argue that imposing additional fees on OTT platforms could stifle innovation, increase costs for consumers, and potentially violate net neutrality guidelines.

The debate continues as telcos seek government intervention to establish a revenue-sharing model that ensures the sustainability of telecom networks amid the growing demand for data-intensive services.