US Tech Giants vs. Indian Telcos: A Battle for Internet Control

Global technology giants are resisting efforts by India's telecom networks to impose stricter regulations on internet services. 

The telecom networks argue that imposing stricter regulations on internet services are necessary to create a "level playing field" and address national security concerns. However, the tech companies, represented by the Asia Internet Coalition (AIC)—which includes Amazon, Apple, Google, Meta, Microsoft, Netflix, and Spotify—are pushing back against these proposals.
 
In their submission to the Telecom Regulatory Authority of India, the AIC emphasized the fundamental differences between over-the-top (OTT) services and traditional telecom operations.
 
The AIC contends that over-the-top (OTT) services, which include many of the services provided by its members, operate fundamentally differently from traditional telecom services. They argue that while telecom operators work at the network layer, OTT services function at the application layer and offer different functionalities, such as group chats, voice notes, and in-app content sharing. Unlike TSPs, OTT providers do not have the right to acquire spectrum, obtain numbering resources, or interconnect with the public switched telephone network.

 
The resistance from global technology giants is a direct response to a coordinated effort by India's leading telecom operators—Bharti Airtel, Reliance Jio, and Vodafone Idea—to bring over-the-top (OTT) services under a new authorization framework. Reliance Jio, the largest telecom operator in India with over 475 million subscribers, along with other telecom companies, has recommended that OTT providers should contribute to network development costs. This contribution would be based on factors such as their traffic consumption, turnover, and user base.
 
The telecom operators' push for regulatory changes comes amid financial pressures, as they struggle with low average revenue per user (ARPU), which is approximately $2 per month. This financial strain has been exacerbated by their substantial investments in 5G infrastructure, totalling $19 billion last year. By advocating for OTT providers to share the financial burden, the telecom operators aim to improve their margins and secure a more sustainable business model.
 
The global tech giants' resistance highlights the ongoing conflict between traditional telecom operators, who are seeking ways to monetize their networks and investments, and OTT service providers, who fear that additional regulations and costs could stifle innovation and limit consumer access to affordable digital services. This debate is part of a broader conversation about how to fairly regulate and sustain the rapidly evolving digital ecosystem.

Dr. Deepak Kumar Sahu, Editor-in-Chief-VARINDIA