Govt Addresses Concerns Regarding Recent Mobile Service Tariff Hike

In response to the recent misleading claims about the increase in mobile services tariffs, the Ministry of Communications has clarified the factors influencing these changes, majorly emphasizing the role of market forces and regulatory frameworks in maintaining low mobile services costs in India.

India’s mobile service sector is driven by its three private sector players and one public sector player, and these operate through the market forces of demand and supply.

The response given by the ministry claims the government’s focus is on protecting subscriber interests, fostering orderly growth through investments in cutting-edge technologies, and ensuring the financial viability of the sector. 

Under the Telecom Regulatory Authority of India (TRAI) Act of 1997, TRAI serves as the independent regulator for telecommunication services, tasked with regulating service rates. For the past two decades, TRAI has maintained mobile service rates under forbearance, resulting in some of the lowest costs for subscribers worldwide.

According to the International Telecommunication Union (ITU) in 2023, India’s average monthly cost for a basic mobile, voice, and data package is USD 1.89, significantly lower than in neighboring and advanced economies. A comparative analysis of mobile service pricing given by the government shows India’s affordability.

However, the license conditions mandate that licensees adhere to tariff orders, regulations, and directions issued by TRAI. The tariffs are decided by market forces within the regulatory framework set by TRAI. The government does not interfere with these free market decisions.

With its response, the ministry emphasizes the importance of balancing subscriber protection with the orderly growth of the telecommunications sector. Investments in the latest technologies such as 5G, 6G, IoT, and M2M for Industry 4.0 which are crucial for the sector's sustainability.

 Despite the recent tariff increase after more than two years, TSPs have made substantial investments in rolling out 5G services nationwide. These investments have led to a significant increase in median mobile speeds, now reaching 100 Mbps, and a dramatic improvement in India’s international ranking. The last decade has seen a transformation in the telecommunications sector, moving away from controversies and stagnation towards transparency and exponential growth.