Please see below my contribution to the questions raised in your consultation paper for regulatory framework for OTT services -
Question 1: Is it too early to establish a regulatory framework for
OTT services, since internet penetration is still evolving, access
speeds are generally low and there is limited coverage of high-speed
broadband in the country? Or, should some beginning be made now
with a regulatory framework that could be adapted to changes in the
future? Please comment with justifications.
ANSWER
<Yes, its way too early to even start thinking along these lines. With even 3G services giving a 2G like experience, and bandwidth caps in place, to talk of regulating OTT services doesnt make sense. Especially, for an emerging economy like India, harnessing the innovative power of the mobile revolution relies to a large extent on the common man availing of the various possibilities opened up by OTT apps. In any case, TSPs will continue to make money from the high data usage of urban consumers who will move to HD-video services, so its not like the industry is struggling to survive.>
Question 2: Should the OTT players offering communication
services (voice, messaging and video call services) through
applications (resident either in the country or outside) be brought
under the licensing regime? Please comment with justifications.
ANSWER
Not required. In a country like India, a very small proportion of mobile users are using these services - due to limited 2G/3G connectivity, and lack of smartphone penetration. Also, even countries like USA have providers like Vonage who sell VOIP services - TSPs have to learn to evolve like any other industry, trying to build protectionist walls to ward off new competition is not the way forward, especially for a country like India which has to make the best use of these leap-frogging technologies.
Question 3: Is the growth of OTT impacting the traditional revenue
stream of TSPs? If so, is the increase in data revenues of the TSPs
sufficient to compensate for this impact? Please comment with
reasons.
ANSWER
The data provided in the consultation paper clearly shows that TSPs will continue to remain profitable in the medium to long term.
"In India, the overall revenue of TSPs is expected to reach $46-49 billion
by 202039 up from $28 billion in 2013. Data revenues will form a
substantial portion of the total revenues and is expected to rise from 10-
12 percent in 2013 to 35-40 percent by 2020"
Question 4: Should the OTT players pay for use of the TSPs network
over and above data charges paid by consumers? If yes, what pricing
options can be adopted? Could such options include prices based on
bandwidth consumption? Can prices be used as a means of
product/service differentiation? Please comment with justifications.
ANSWER
This has the potential to kill young technical entrepreneurship in the country. Big players like Google etc will just kill off local competition by cutting deals with TSPs. Most OTT players hardly earn any revenue in initial years, and only slowly become financially viable through advertising, subscription models etc. Asking them to shell out charges to TSPs will just kill them right at the beginning.
As regards the need to regulate OTTs - I dont see any such need, as OTT operate in a fierecely competetive marketplace, where consumer is king. Also, OTT apps only gain trust if they come from an established ecosystem (like google play) or get favorable consumer reviews. As for ecom sites, the general cyber laws govern any financial transaction on the web should apply to them too. Customer any should have the option to approach consumer courts in case of breach of services. But special regulation just for this sector is unwarranted and is likely to throttle the growth of ideas & innovation which is the hallmark of the tech industry.
It is in the interest of TSPs to invest in network upgradation as their revenue from data services will grown exponentially. They have an assured market for their services, compared to the cut-throat CAPs world.
I strongly urge you to maintain net nuetrality in India, and not allow TSPs to introduce differential pricing for accessing specific OTT apps.