Why is big tech flirting with Indian telecos ?

Context: In the current economic crisis, big tech-telco combinations may come in handy, but they come with their own threats to the existing competitive landscape.

Indian Online Telecom Potential: Report by Internet and Mobile Association of India highlights tremendous growth potential for telecom sector in India.

• India recorded 94 % of the total internet traffic on mobile networks as compared to only 6% on Wi-Fi networks.
• 80% of mobile data was accesses on 4G networks indicating the exodus of people from 2G/3G networks.
• More users are from rural India (227 million) as compared to urban India (205 million); huge future potential as still 70% of the rural population does not have access to internet.

Bigtech-telco backscratching arrangements: 

• Bigtech want to leverage vast subscriber base, while Telcos need money especially with 5G auction being around the corner.

• For E.g. While Amazon can monetise over increased user base and advertisements, telcos can gain market and monetise increased data consumption.

Threats due to Bigtech-telco collaboration:

• Gatekeeper Problem: It may result into consolidation of big-data which makes it harder for the smaller ones to take part in the competition.
• Net Neutrality: Telcos have access to advanced tools such as “deep packet inspection” to monitor data traffic, which can be misused to divert traffic towards a specific site.
• Unequipped Competition Commission of India (CCI) and Trai: In the absence of a Data Protection Authority, CCI and Trai seems to be struggling:

• CCI recently cleared Facebook/Jio deal without resistance and it needs to be seen if similar steps would be taken for future data driven transactions.
• Although telecom licenses mandate net neutrality since 2018, no enforcement has been seen on ground where violations have occurred.

Way Forward: 

• Break the Monopolies: State authorities must learn to break the vicious cycle of allowing the creation of monopolies only to break them to reinstate competition.