Mumbai: In a statement issued on Friday, the Internet and Mobile Association of India (IAMAI) expressed outrage at the regression and denigration of the debate over regulating the digital economy. Far from the government's stated goal of creating a trillion-dollar digital economy, the telecom infrastructure industry has attempted to reignite debates that threaten to undo the progress made by the Indian tech industry thus far.
According to data released by the union ministry of electronics and information technology (MeitY), India's digital economy has grown dramatically over the last decade, generating more than $200 billion in economic value each year.
Part of this expansion has been the compartmentalisation of legislation governing carriage and content. India has enabled the growth of both OTT and traditional telecommunications service providers by regulating carriage and content separately.
The rapid creation of India's 100+ unicorns exemplifies this phenomenon. Despite this meteoric rise that has propelled India to the forefront of the global start-up scene, the recently concluded consultation on the draft telecom bill reveals either a deliberate misinterpretation or a fundamental lack of understanding of how the digital economy operates.
An industry body representing the telecom infrastructure sector has championed the creation of revenue-sharing mechanisms for ‘over-the-top’ (OTT) layers within the ambit of the draft telecom bill.
The association claims that this decision would have far-reaching effects in addition to being disastrous. We pose an existential threat to India's startup environment by erecting impassable barriers to entry and allowing licensing rules to apply to over-the-top service providers. Foreign investors who are bullish on Indian start-ups may face a chilling effect as a result of the extreme policy uncertainty, which would mean that not only would aspirant Indian start-ups who are still developing and evolving their business and monetisation models face massive compliance costs in their early stages.
"Despite this, certain policy experts continue to propagate fantasies about equitable contributions from stakeholders within the OTT layer, which would only seem to strengthen the gatekeeping abilities of the owners of the infrastructural layer on which OTT services operate. These changes would only establish additional sources of revenues for well-established sectors while leaving the start-up ecosystem vulnerable to compliance costs even when they may be pre revenue," IAMAI said.
IAMAI, in its letter to the department of telecommunications, expressed grave concern about the impact of these changes on India’s start-up ecosystem and the digital economy. IAMAI also sought to illustrate the success of the extant regulatory framework, which facilitated the creation of 100+ unicorns and 200+ billion dollars of growth, achievements that have enabled India to dream of a one-trillion-dollar digital economy.
Considering this, IAMAI has recommended that the scope of telecommunications services be reviewed and limited to only those who distribute spectrum in a usable form. The time-tested distinction between telecom spectrum-controlling entities and spectrum-using companies should be maintained, as it has been the basis that has allowed innovation and deeper penetration of the internet in India.
