In Short:
India’s mobile services operate based on demand and supply. The government stated that tariffs offered by private and public telecom companies in India are among the lowest globally. The Ministry of Communications defended recent tariff hikes by private players, stating that rates are regulated by TRAI to ensure low costs for subscribers. Telecom companies increased prices after two years to ensure financial viability for future technologies like 5G and Internet of Things.
Indian Mobile Services Operated by Market Forces, Government Denies Tariff Hike Claims
India’s mobile services are driven by the forces of demand and supply, with three private telecom companies and one public sector player offering some of the lowest tariffs globally. Recently, the government responded to criticisms about alleged mobile tariff hikes by clarifying the situation.
Government Responds to Criticism
The Ministry of Communications issued a statement addressing concerns raised by the Congress party regarding the recent mobile tariff increases by private operators. The government defended the actions of telecom companies, stating that rates are regulated by the Telecom Regulatory Authority of India (TRAI), ensuring affordable services for subscribers.
Market Comparison
To support its stance, the government shared a comparison chart of mobile service prices in countries like the US, Australia, and the UK, highlighting the competitive rates in India. For instance, Indian subscribers enjoy unlimited voice calls and 18 GB of data for an average of just USD 1.89 per month, a deal much better than in other markets.
Optimal Market Structure
The statement emphasized that the current market structure, with three private sector players and one public sector player, is ideal for the mobile services industry. This setup operates smoothly under the principles of free market competition, without direct government intervention in tariff decisions.
Industry Viability and Growth
While acknowledging the recent price hikes by telecom companies after a prolonged period, the government stressed the importance of maintaining the financial health of the sector for future growth. It highlighted the need for sustainable growth to support advancements like 5G, 6G, and the Internet of Things.
Past vs. Present
Reflecting on the past decade, the statement noted the transformation of the telecommunication sector in India due to progressive government policies. It mentioned a significant drop in telecommunication rates, attributing the positive changes to a more transparent and growth-focused approach in recent years.
