Data services: Telecom companies, OTTs quarrel over floor price

Telecom operators may be united in their demand for a floor price for mobile tariffs (data & voice), but various start-ups, associations of internet firms as also consumer groups are opposed to the idea.

This is understandable because the telecom operators who are currently providing below-costs services — per GB data rates are as low as computer science or computer engineering. However, start-ups or internet firms, etc are basically OTTs who have seen an explosion in their usage and hence revenues is because of low data rates. If the same goes up substantially now — say Rs 35 per GB — their entire business model and consumer usage could be adversely affected.

For instance, associations including IAMAI, Internet Society, CCAOI, Asia Internet Coalition (AIC) etc, which primarily cater to internet companies, are opposing the idea of setting a floor price. The reason given by most of these bodies is that any kind of policy intervention will make services offered by telecom operators unaffordable for low-income and rural groups. “Having a floor price will distort competition in the market by rewarding inefficient players and minimizing incentive amongst the operators to innovate. Consumers too will be deprived of newer and economical services,” AIC managing director Jeff Paine said.