Rise In Data, Devices Prices Barrier To Rapid Digitisation In India: MoS IT

Hours after telecom major Airtel hiked tariffs across multiple circles, the Minister of State (MoS) for Electronics and Information Technology, Rajeev Chandrasekhar, has termed any hike in the prices of data or devices a challenge for the country’s vision of rapid digitisation.

A ‘rise in the cost of data or devices is a cause of concern’ because it impedes rapid digitisation, PTI said in a report, quoting Chandrasekhar.

Noting that the Russia-Ukraine war has impacted prices across the globe, Chandrasekhar said that the ministry may approach the Telecom Regulatory Authority of India (TRAI) to examine whether the price hike would have a long or a short-term impact. 

The comments came after Bharti Airtel wound up its minimum recharge of INR 99, which essentially increased the price of its minimum recharge by 57% to INR 155 in seven additional circles, which include Andhra Pradesh, Bihar, Himachal Pradesh, Karnataka, Northeast, Rajasthan, and Uttar Pradesh (West).

Last year, Airtel had piloted the tariff hike in Haryana and Odisha. In total, the new rates are now effective in nine circles. 

The move to increase recharge prices was inevitable, as the industry has been operating on razor thin margins ever since Reliance Jio jumped into the telecom fray.

According to a report, India was the fifth least expensive country in the world to buy one GB of mobile data at $0.17 in 2022. 

The cheap data and smartphone rates have spawned the Indian digital economy and added a drove of new users to its fold. As per TRAI, India was home to 1,143.63 Mn telecom subscribers by the end of October 2022. Further, the total volume of wireless internet data usage in India stood at 32,397 petabytes in 2021, while average data usage per user hovered around 14 GB at the end of June 2021, according to the Economic Survey of India 2021-22. 

But, this has come at a cost for telecom operators. The industry operates on smaller margins with just two players – Reliance Jio and Bharti Airtel – accounting for the majority of the subscribers. Vodafone-Idea (VI) seems to be losing millions of subscribers every month. 

The rising costs to maintain operations and the recent splurge on 5G auctions has forced the telcos to hike prices to pad up their revenues and strengthen their bottomline. With more capital expenditure on the way, as telcos plan to increase the deployment of 5G networks, the companies have been looking to increase prices across telecom circles.

As of now, all eyes are on Reliance Jio whether it embraces a similar move.