Indian telecommunications companies are seeking compensation from tech companies for utilizing their network services

Indian telecommunications companies are seeking compensation from tech companies for utilizing their network services

Telecom operators in India, the second-largest wireless market globally, are urging internet companies to compensate for using their networks. This recommendation has been made to the local regulatory body and reflects a growing perspective seen in other parts of the world. However, it also raises concerns about potential violations of net neutrality.

Jio, India’s largest telecom operator with over 450 million subscribers, has proposed that internet companies should be required to “contribute” to telecom network costs based on factors such as their traffic consumption, turnover, and user base. This suggestion aims to create a more equitable playing field and aligns with a perceived consensus among telecom operators worldwide.

Airtel and Vodafone-Idea, two other major telecom players in India, support this stance. Airtel, in addition, suggests that only the largest users of internet infrastructure should bear network usage costs, allowing smaller startups to grow without hindrance.

India’s wireless market is among the world’s largest, but the average revenue per user is relatively low. The top three telecom operators in India recently agreed to pay $19 billion to use 5G airwaves and are seeking regulatory intervention to improve their margins.

Critics argue that the telecom operators’ recommendations could violate the principles of net neutrality. They caution that requiring tech companies to cover network costs might lead to reduced innovation investments and potentially shift these expenses to consumers.

Many tech companies, through industry associations, have also criticized these suggestions, emphasizing that their services have boosted telecom revenues. They worry that such cost-sharing models could harm net neutrality and consumer well-being in the long run.

Telecom companies in India argue that their recommendations do not violate net neutrality. They propose a flexible approach that allows telecom service providers to invest in infrastructure and enables OTT players to benefit from expanded infrastructure based on their traffic volumes.

Similar recommendations are being made by network operators and other entities in South Korea and Europe. The push for compensation from tech companies comes as telecom networks anticipate exponential growth in traffic, particularly with the development of 5G and the forthcoming 6G networks.