Bringing OTT players under license regime to present existential threat to startup ecosystem: IAMAI

Internet and Mobile Association of India (IAMAI) said that by regulating carriage and content separately, India has enabled the growth of both OTT service providers as well as traditional telecommunication service providers, which is reflected in the digital economy generating over USD 200 billion of economic value each year.

“Creating room for licensing provisions applicable to over-the-top service providers presents an existential threat to India’s start-up ecosystem by creating herculean barriers to entry…but also would mean that foreign investors bullish on Indian start-ups may experience a chilling effect, owing to the drastic policy uncertainty,” IAMAI said in a statement.

IAMAI said that the existing regulatory framework has resulted in the rapid creation of India’s over 100 unicorns.
“Despite this astronomical growth that has allowed India to leapfrog into becoming a global start-up hub, the recently concluded consultation on the Draft Telecom Bill betrays either a wilful misinterpretation or a fundamental lack of understanding of how the digital economy works,” IAMAI said.

IAMAI criticised the views of a telecom infrastructure industry body to create revenue sharing mechanism between OTT and telecom service providers.

“An Industry body representing the telecom infrastructure sector has championed the creation of revenue-sharing mechanisms for ‘Over the Top’ (OTT) Layer within the ambit of the Draft Telecom Bill. The implications of this move would be as far-ranging as they would be devastating,” it added.

Telecom operators body COAI on November 22 made a strong pitch for OTT (over-the-top) communication services to directly compensate telcos for data traffic they are driving onto the networks, as it advocated a licensing and light-touch regulatory framework for such services.

IAMAI, in its letter to the telecom department, expressed grave concern about the impact of these changes on India’s startup ecosystem and the digital economy.