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Loss of Rs 1,000 crore annually in tax collection from top OTT players

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In Short:

The government is losing around Rs 800 crore every year due to a lack of regulations on large traffic generators or over-the-top biggies, according to the Cellular Operators Association of India. Telecom carriers have spent Rs 10,000 crore in additional capital expenses to support OTT players. The industry believes that OTT providers should contribute towards network infrastructure maintenance. Telcos and OTT players are at odds over the issue.

Government Losing Rs 800 Crore Annually Due to Lack of Regulation on OTT Players: COAI

The Cellular Operators Association of India (COAI) has stated that the government is facing an annual revenue loss of nearly Rs 800 crore due to the absence of regulations on large traffic generators or over-the-top (OTT) service providers.

Financial Impact and Recommendations

According to COAI director general SP Kochhar, telecom carriers like Reliance Jio, Bharti Airtel, and Vodafone Idea are collectively losing around Rs 800 crore in Adjusted Gross Revenue (AGR) dues and indirect taxes due to the lack of regulation on OTT giants.

The telecom industry body suggests that if OTT players contribute fairly, the state exchequer could benefit by around Rs 800 crore annually. A recent study indicated that telecom service providers spent an additional Rs 10,000 crore on infrastructure to support data traffic generated by top OTT platforms.

Need for Regulatory Intervention

Kochhar emphasized the importance of OTT providers contributing to the upkeep and expansion of network infrastructure, especially with the transition to 5G technology. He suggested that if consensus is not reached between telecom operators and OTT players, the government should intervene and establish a regulatory framework.

Industry Concerns and Global Perspective

Leading OTT entertainment service providers in India include Netflix, Disney+ Hotstar, Amazon Prime, AltBalaji, and Zee5. Kochhar highlighted that similar fair-share discussions are ongoing in other international markets as well.

The COAI has raised concerns to the finance secretary regarding the economic impact of OTT players utilizing telecom infrastructure without proportionate contributions. The unresolved fair share issue has led to a contentious debate between telecom companies and OTT service providers.

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