The Internet and Mobile Association of India (IAMAI) on Friday has said that creating room for licensing provisions applicable to over-the-top (OTT) service providers presents an existential threat to India’s start-up ecosystem by creating herculean barriers to entry.

In its recommendations to the Draft Telecom Bill, the industry body said “Not only would this mean that aspiring Indian start-ups which are still evolving and developing their business and monetisation models will risk massive compliance costs in their infancy, but also would mean that foreign investors bullish on Indian start-ups may experience a chilling effect, owing to the drastic policy uncertainty”.

Infrastructure sector

An industry body representing the telecom infrastructure sector has championed the creation of revenue-sharing mechanisms for OTT layer within the ambit of the Draft Telecom Bill, it said adding the implications of this move would be as far-ranging as they would be devastating.

It stressed that 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 revenue for well-established sectors while leaving the start-up ecosystem vulnerable to compliance costs even when they may be pre revenue,” it said.

Review scope

It also noted that the scope of telecommunication services should be reviewed and be limited to only services which distribute spectrum in a utilisable 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, it noted.

“Far from the government’s stated goal of creating a $1 trillion digital economy, part of the telecom infrastructure industry has sought to reignite discussions that threaten to erase the progress the Indian tech industry has achieved thus far.

IAMAI, in its letter to the Department of Telecommunications (DoT) also 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 facilitated the creation of 100+ unicorns and $200+ billion of growth, achievements which have enabled India to dream of a $1 trillion digital economy, it added.