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COAI calls for level playing field between operators and OTT providers

COAI calls for level playing field between operators and OTT providers

The COAI (Cellular Operators Association of India) has asked India’s Department of Telecoms to make fair competition a top priority in drafting its new telecom policy.

With many of India’s operators seeing their revenues drop amid a spate of mergers and acquisitions, the COAI argued that an updated telecom policy must safeguard operators’ investments. The association noted that the DoT’s options included making OTT providers play by the same rules as traditional operators, or completely deregulating the market.

COAI’s director general Rajan Mathews noted that while OTT providers are able to compete fairly evenly with mobile operators’ voice services, there was a vast discrepancy in their expenditure as they are not obliged to pay licence fees or spectrum charges.

In addition, the COAI recommended that the DoT set out a schedule for allocating spectrum, noting that reviews of the spectrum that could be released for cellular deployments should be conducted five times annually. COAI also demanded that no spectrum should be available without a fee, particularly in sub-1GHz bands.

With operators under increasing financial pressure, major consolidation is underway in the Indian market. The lack of appetite for a fresh round of bidding did not stop the DoT from scheduling a spectrum auction for the second half of 2017, although members of the COAI in April called for the bidding to be delayed by at least a year.

Mathews said that if the DoT took COAI’s policy suggestions into account, it would help to stabilise the financial situation of India’s mobile operators, particularly if the revisions were complemented the reduced spectrum usage fees and Universal Service Obligation charges that COAI has previously called for.   

In June, the DoT asked the country’s finance ministry to revise down its projected figures for the non-tax revenue it aimed to collect from mobile operators for the fiscal year ending March 2018. For this fiscal year, the DoT has predicted a 37% year-on-year drop in revenue due to the fierce price war instigated by Reliance Jio’s entry into the market.