Indian telcos ask internet companies to compensate for network usage

Telecom operators in India, including Jio, Airtel, and Vodafone-Idea, have recommended that internet companies compensate for using their networks. They argue that this would create a level playing field and ensure fair contribution towards telecom network costs. Jio, the largest telecom operator in India (over 450 million subscribers), suggested that internet companies should “contribute” towards network costs based on their traffic consumption, turnover, and the number of users. They argue that requiring internet companies to compensate for network usage would create fairness and balance in their relationship with tech giants.

Airtel, another major telecom player in India, proposes that only the largest users of the internet infrastructure should bear the costs. They believe this approach would allow smaller startups to thrive without a financial burden.

India is one of the world’s largest wireless markets, but the average revenue per user (ARPU) is relatively low. With an ARPU of approximately $2 per month, India ranks among the bottom 5% of low middle- and low-income countries. The top three telecom operators in India paid $19 billion for 5G airwaves and are hoping for regulatory intervention to boost their margins.

Meanwhile, many tech companies, through industry associations, have raised concerns about the recommendations put forward by telecom operators. They emphasize that their services have helped bolster telco revenues and argue that being forced to cover network costs could hinder their ability to innovate. They also warn that a revenue sharing or network usage fees model could violate net neutrality principles.

It is important to note that telecom operators in India are not alone in making such recommendations. Network operators and other bodies in South Korea and Europe are also making similar pushes for internet companies to contribute towards network costs.

In response to this ongoing debate, the Telecom Regulatory Authority of India released a consultation paper, seeking inputs from stakeholders. The regulatory body will consider the recommendations put forward by telecom operators, the arguments of tech companies, and various other perspectives before making any decisions.