Telecom tariffs are decided by market dynamics, govt clarifies

The Ministry of Communications has clarified that rates of telecommunication services are decided by market forces within the framework notified by telecom regulator Trai and the government does not intervene in the free market decisions.

The government said any change in the tariff of mobile services is notified by telecom operators to the Telecom Regulatory Authority of India (Trai), which monitors that such changes are within the prescribed regulatory framework.

It, however, said the policies of the government and regulatory framework of Trai has resulted into one of the lowest costs for subscribers of mobile services in India. The statement came in response to opposition slamming the government for inaction on tariff hikes in the range of 11-25% by the three private operators - Reliance Jio, Bharti Airtel and Vodafone Idea.

Sharing data of neighbouring countries as well as other nations like US, UK, Australia etc, the government said India has one of the lowest tariffs in the world.

The government said while protecting the interests of subscribers, for orderly growth of the telecommunication sector, which include investments in the latest technologies like 5G, 6G, IoT/ M2M for Industry 4.0 etc., the financial viability of the sector is important.

“In case of India, at an average price of $1.89 per month, practically unlimited voice and 18GB per month is available to mobile subscribers,” the government statement said.

The government has shared a comparison of mobile services pricing, as published by International Telecommunication Union (ITU) in 2023 for a minimum mobile, voice and data basket consisting of 140 minutes + 70 SMS + 2GB data. Mobile rates in all the neighbouring countries, barring Pakistan, are on the higher side of India. Pakistan has marginally lower prices. The rates in advanced countries are much higher than India, with the US at the top at $49 per month.

Since the last two decades, the rates of mobile services have been kept under forbearance by Telecom Regulatory Authority of India (Trai).

“In India, presently, the mobile services are being delivered by three private sector licensees and one public sector licensee. From the competition point of view, this is an optimal market structure for mobile services,” the government said.

Last week, the three telcos increased the prices of mobile services after three years. “In last 2 years, some of the TSPs have invested heavily in rolling out the 5G services across the country. This has resulted in a significant increase in median mobile speed to the level of 100 Mbps and a jump in India's international rank from 111, in October 2022, to 15 today,” the government said.

The statement added that before the last 10 years, the telecommunication sector was mired in controversies, lack of transparency and therefore, growth of mobile services was stagnant. During the last 10 years, due to progressive policies of the government, the rates of telecommunication services be it voice or data, have fallen exponentially, its said. “The Government has been a beneficiary of a large amount of non-tax revenue from spectrum auction which has been fully transparent and efficient,” it added.