COAI Note on LTGs endangering Make in India for financial motives

COAI Note on LTGs endangering Make in India for financial motives

Lt. Gen. Dr. S.P. Kochhar, Director General, COAI

“Some recent media stories have reported developments whereby an Appstore provider, which is also a foremost Large Traffic Generator (LTG) globally, has been learned to be removing startups and smaller India-made applications/players from its online property, quoting reasons of non-payment of their quoted charges to these applications, for hosting them. Therefore, these global behemoths seem fully prepared to oust the home-grown Indian companies based on pure financial motive, with no regard for this vital ecosystem of players who bring innovation and entrepreneurship to the fore.

The above is evidently against the spirit of the Government’s flagship and commendable ‘Make in India’ program as well as the progressive approach to foster innovation and encourage smaller organisations, as clearly articulated by the Hon’ble Union Minister of Communications & IT and Railways, Shri Ashwini Vaishnaw, terming such actions as unacceptable.

Ironically, these same LTGs vehemently oppose the proposal for a fair-share contribution for the additional costs borne by the Telecom Service Providers (TSPs) for carrying their disproportionately large traffic and provisioning the increasingly demanding infrastructure required to deliver so. Moreover, the LTGs’ advocates contend that this fair-share charge would deter small players/startups from being able to operate on the network. The TSPs, however, have endlessly reiterated that smaller players, startups and MSMEs which generate low traffic would not be required to pay the fair-share charge, but only the top 4-5 LTGs which generate the mammoth volumes of traffic would have to contribute the same to share in the rising network costs.

One must note that the app stores are making huge revenues from the app developers and buyers/users of apps, and also by monetizing the users’ data and through ads and other businesses. It is rather surprising that these LTGs, which are generally global corporates based in foreign countries, are ready to evict non-paying small businesses as they expect the “immense value” that their platform provides to the apps, themselves prefer to enjoy a free ride over the TSPs’ networks, while profiting heavily from them. Moreover, they continue to make misleading claims that the proposed fair-share would hurt the startups, MSMEs and smaller players and constrain innovation, which is clearly contrary to the truth.”

• Lt. Gen. Dr. S.P. Kochhar, Director General, COAI