The Ministry of Communications clarified that the rates of telecommunication services are decided by market forces within the regulatory framework notified by the independent regulator, the Telecom Regulatory Authority of India (TRAI). The Government does not intervene in free market decisions as the functionality is under the domain of TRAI and tariffs are under forbearance.
Also Read: Government Enforces New Sections of Telecommunications Act 2023
Government Response to Recent Tariff Hikes
The government on Friday clarified this in response to misleading claims regarding the recent mobile services tariff hikes of 11-25 percent by three Indian private operators, Bharti Airtel, Vodafone Idea, and Reliance Jio, which immediately followed the 2024 Spectrum Auction.
Highlighting India's competitive edge in telecom pricing, the government pointed out that TRAI's policies have facilitated some of the lowest costs globally for mobile services. Citing data from the International Telecommunication Union (ITU) for 2023, India offers a basic mobile package — including 140 minutes of voice, 70 SMS, and 2GB of data — for an average of USD 1.89 per month.
Comparatively, neighbouring countries such as Pakistan and Nepal provide similar services at USD 1.39 and USD 2.75 respectively, while more developed economies like the USA and UK see significantly higher costs, ranging from USD 12.5 to USD 49 per month.
India's Competitive Telecom Pricing
"In the case of India, at an average price of USD 1.89 per month, practically unlimited voice and 18GB per month is available to mobile subscribers," the government statement said.
"In India, mobile services are presently being delivered by three private sector licensees and one public sector licensee. From a competition point of view, this is an optimal market structure for mobile services," the government said.
The government emphasised that while protecting the interests of subscribers, the orderly growth of the telecommunication sector—which includes investments in the latest technologies like 5G, 6G, IoT/M2M for Industry 4.0—is important for the financial viability of the sector.
Also Read: Airtel Unlimited 5G Prepaid Plans Post the 2024 Tariff Revision
Impact of 5G Rollout on Mobile Speeds
The government mentioned that TSPs have increased the prices of mobile services after more than 2 years. In the last 2 years, some TSPs have invested heavily in rolling out 5G services across the country, catapulting India's mobile speeds to 100 Mbps and elevating its international ranking from 111 to 15.
Growth Over the Past Decade
The statement added that over the past 10 years, the telecommunication sector was previously mired in controversies and lacked transparency, which led to stagnant growth in mobile services. Due to the government's progressive policies over the last decade, the rates of telecommunication services, whether voice or data, have fallen exponentially, it said. "The Government has benefited from a large amount of non-tax revenue from spectrum auctions which have been fully transparent and efficient," it added.
