Telecom Industry Calls for Revenue Sharing with Large Traffic Generator Apps
The Cellular Operators Association of India (COAI) has renewed its demand for revenue sharing between telecom operators and large traffic generator apps like Netflix and Instagram. This request comes amidst the increasing demand for bandwidth and the need for substantial investments in network infrastructure upgrades.
In a letter to the telecom secretary, COAI highlighted the critical need for the government to address this issue and set a precedent for the world. The association emphasized the significant investments required by telecom operators to support AI-based applications and high-definition video streaming by large traffic generators (LTGs).
COAI suggests that LTGs share their revenue with telecom operators to build networks that can provide better user experiences. However, this proposal has faced opposition from advocacy groups and industry bodies like Broadband India Forum, who argue that revenue sharing would stifle innovation and harm startup ecosystems.
COAI's letter also addressed concerns raised by LTGs and their advocates regarding the impact of revenue sharing on startups. The association pointed to recent developments where an app store provider (a global LTG) removed startups and smaller Indian-made applications from its platform due to non-payment issues. This incident contradicts the claims of LTGs and highlights their financially motivated approach.
COAI further cited examples from the US, European Union, Brazil, and South Korea, where progress has been made with regard to revenue sharing between telecom operators and LTGs. The association also emphasized the need for investments in newer technologies like video optimization and AI-based processing, which require significant upfront costs and long delivery times.
COAI believes that revenue sharing would help balance the cash outflows for telecom operators and ensure the development of robust network infrastructure to meet the growing demand for bandwidth. The association urges the government to take note of the issue and create a framework that benefits both telecom operators and LTGs while fostering innovation and growth in the Indian digital ecosystem.