In recent discussions, telecom operators in India have voiced their concerns regarding the absence of regulation for over-the-top (OTT) messaging and calling applications, such as WhatsApp and Telegram. These apps have proliferated in usage, yet their operators are not subject to the same regulatory frameworks as traditional telecom services. The leaders from major telecommunication firms like Reliance Jio and Bharti Airtel argue that this lack of regulation gives OTT services an unfair competitive advantage, thus threatening the sustainability of their businesses.
Key discussions took place during a meeting with Union Minister Jyotiraditya Scindia, where the operators highlighted the pressing challenges they face. The Telecom Regulatory Authority of India (Trai) has recommended excluding these OTT services from the current licensing framework. By not including OTT apps in the same regulatory landscape, telecom companies assert that they are forced into deeper financial strains. Bharti Airtel CEO, Gopal Vittal, emphasized that regulations surrounding OTT platforms must be put in place to maintain a level playing field.
Financial sustainability is a pivotal concern for these operators. Many of them are still struggling with the burden of adjusted gross revenue (AGR) payments. For instance, Vodafone Idea is grappling with a staggering debt of ₹70,320 crore, while Bharti Airtel’s liabilities amount to around ₹21,500 crore. These debts severely limit their operational capabilities and threaten their viability in a fiercely competitive market.
Recent rulings illustrate the severity of the situation; the Supreme Court dismissed Vodafone Idea’s plea regarding their AGR obligations, underscoring the legal challenges that could push them closer to insolvency. The telecom sector in India is not only highly competitive but has also seen a significant decline in profitability. The operators argue that the financial impact of these regulatory burdens, combined with the competitive edge provided to unregulated OTT services, makes it increasingly difficult for them to compete effectively.
Moreover, the issue of unsolicited commercial calls and SMS has further complicated the operators’ situation. These unwanted communications not only frustrate consumers but can also result in loss of market trust and reputation for the telecom companies. In a joint statement, operators urged the Department of Telecommunications (DoT) to strategize measures to minimize such communications and ensure greater consumer protection.
The challenges faced by telecom operators extend beyond financial pressures and regulatory hurdles. With the increasing reliance on digital communications during the pandemic, operators have also been pressed to innovate and improve their services. Scindia’s recent engagement with telecom equipment manufacturers is an acknowledgment of the need for collaboration across various sectors to foster innovation and address sector-wide challenges.
Another layer to this intricate situation is the ongoing global trend in telecom diversifications. Countries around the world, including the United States and parts of Europe, are directing attention towards regulating OTT services while simultaneously supporting their local operators in grappling with similar challenges. By setting precedents in regulatory frameworks, these nations could offer a roadmap or cautionary tale for Indian telecoms.
The lobbying of Indian telecom companies for regulatory reform is not just a plea for their survival, but also a call for a broader discussion on the future of telecommunications in the country. With the evolution of communication technologies and the shift towards digital ecosystems, regulators will have to evaluate what a sustainable and equitable framework looks like in this new age.
To summarize, the demands of telecom operators in India for OTT app regulation are fundamentally rooted in the need for a competitive landscape. The extreme financial pressures they face, exacerbated by the absence of a regulatory framework for OTT services, position them in a vulnerable spot. The outcome of these discussions could shape the future of India’s telecom sector and influence how similar global markets tackle the streaming service versus traditional operator dilemma.
