Trai to provide clarity on licensing regime for OTTs by Aug-end: Officials

Telcos want communication OTTs to be regulated under the same conditions and treatment as them

The Telecom Regulatory Authority of India (Trai) is set to provide its recommendations on whether communication over-the-top (OTT) services such as WhatsApp, Facebook Messenger, and Telegram should be brought under an authorisation or licensing regime similar to telecom operators like Reliance Jio, and Bharti Airtel, the Department of Telecommunications (DoT) officials said.

Tech and startup industry bodies have been at loggerheads with telecom operators on efforts to bring OTTs under a licensing regime, which will open them up to taxation.

Trai floated a consultation paper on the framework for service authorisations to be granted under the Telecommunications Act, 2023.

As part of the public consultations on the issue held on Wednesday, industry voices on Wednesday reiterated their positions on the matter, officials said.

“Trai will provide clarity on the matter soon, by the end of the month,” an official said.

Telcos have repeated that OTT communication services are covered under the new Telecom Act as an access service, and demanded ‘same service same rules’ for OTT players, he added.

Meanwhile, tech interests have stressed any additional regulatory intervention will lead to entry costs on the industry, increase the cost of service, which could be passed on to consumers.

OTTs have also stressed that telcos operate solely at the network layer while OTTs function exclusively at the application layer.

On Wednesday, telecom industry body Cellular Operators Association of India (COAI) said this characterisation is fundamentally flawed and misrepresents the technical reality of modern IP communications. 

“As per our understanding, OTT Communication services are covered under the new Telecom Act as an access service,” SP Kochhar, director general, COAI said.

Earlier this week, the Internet & Mobile Association of India (IAMAI), NASSCOM and the US India Strategic Partnership Forum (USISPF) among others wrote to the government arguing against efforts to include them under the Telecom Act.

“OTTs are fundamentally different from telecommunication services and therefore, the same service-same rule does not apply. OTTs and telcos complement each other and do not compete. OTT service providers contribute immensely to the revenues generated by TSPs,” Nasscom had said.

But DoT officials told Business Standard earlier this week that OTTs in general remain a grey area until further clarity is provided by the government.

The 46-page Telecom Act passed in the Parliament in December last year, defined telecommunications services as “any service for telecommunications”.

Initial drafts of the Bill had specifically extended the definition to OTT services among a wide range of specialised communication services, including machine to machine communication, in-flight and maritime connectivity.

This was demanded by telecom service providers who argued OTTs offer audio and video calls and messaging without paying licence or spectrum fees.

In the absence of modern legislation, many technologies such as OTTs were judicially interpreted to be under the erstwhile Indian Telegraph Act as well as the IT Act, 2000.

To remove confusion, OTTs will be regulated by the Ministry of Electronics and Information Technology’s proposed Digital India Bill, then-Telecom Minister Ashwani Vaishnaw had said.