Hike in tariffs by telcos might impact OTT industry: Expert

Hyderabad: The intense competition between telecom operators Jio, Bharti Airtel and Vodafone Idea doesn't augur well for the OTT (Over The Television) sector in the long run, said an expert.

Talking to The Hans India on the sidelines of Indiajoy – India's biggest event for gaming, media and entertainment here in Hyderabad on Wednesday, Girish Menon, Partner & Head, Media and Entertainment, KPMG said, "In the short run, customers from Tier-1 cities wouldn't mind paying an increase in tariff unlike customers from Tier-II & III cities, but if Trai (The Telecom Regulatory Authority of India) doesn't come up with a quick solution by initiating the consultation process for revision in telecom tariffs, operators in the OTT space will definitely stand to lose because of the hike in mobile and data charges."

Confronted with intense competition and unprecedented statutory dues, older operators Bharti Airtel and Vodafone Idea had on Monday announced a hike in mobile phone call and data charges from December saying the increase was warranted for viability of their business.

Like Jio (which announced the tariff hike on Tuesday), the two telcos did not quantify the increase in rates but instead said that the hike will be effective beginning next month.

Stating that 5G technology will definitely enhance the experience of television viewers in India, Girish said, "Since most of the OTT platforms run on 4G bandwidth which, is more than sufficient, policy environment for 5G is vital as India begins preparations for adopting fifth generation (5G) cellular technology that can carry data at a tenth of the cost that current 4G networks do.

Gigabit-speed networks that give rise to various new ways to use the internet could significantly alter the nature of telecom regulation; 5G architecture is radically different from existing networks and would call for considerable investment by cellular operators as they go about setting up their grids."