In Short:
The Centre for Digital Economy Policy Research (C-DEP) stated that the Indian government needs to ensure a sustainable telecom industry due to low average revenue per user. Jaijit Bhattacharya from C-DEP highlighted challenges with 5G and stagnant revenue. Telecom operators need higher ARPU to deploy 5G networks. There is a debate on fair share between telecom operators and OTT players. Regulating OTT firms is under consideration by TRAI.
C-DEP Calls for Sustainable Telecom Industry Amid Low ARPU
The Centre for Digital Economy Policy Research (C-DEP) has emphasized the need for the government to ensure the sustainability of the telecom industry, pointing to the low average revenue per user (ARPU) that has triggered a fair share debate.
Industry Perspective
Jaijit Bhattacharya, founder & president of C-DEP, highlighted that the increase in data traffic, especially during the COVID-19 lockdowns, has put pressure on the telecom industry. Market leaders like Reliance Jio and Bharti Airtel are investing heavily in next-generation networks, but monetization remains a challenge.
According to industry estimates, India’s telecom carriers have an ARPU of around Rs 150, significantly lower than the global average of Rs 700. To support the deployment of 5G networks, operators would need an ARPU of Rs 270-Rs 300 in the next few years.
Regulatory Challenges
Bhattacharya suggested that large traffic generators should share revenues fairly, similar to models seen in countries like South Korea. The ongoing debate between telecom operators and over-the-top (OTT) players regarding revenue sharing continues, with regulatory bodies like Trai considering the inclusion of OTT firms under their ambit.
In the US, there are proposals for large internet apps to contribute to infrastructure costs, potentially lowering broadband expenses for consumers. C-DEP believes that resolving these regulatory issues will take time but is essential for the long-term sustainability of the telecom sector.
