In Short:
The Ministry of Communications stated that telecommunication service rates are decided by market forces, not government intervention. India has some of the lowest mobile service costs globally. The government highlighted that the sector’s financial viability is crucial for growth and investment in technologies like 5G. Rates have been under forbearance for two decades, and recent price hikes by telcos are linked to investments in 5G.
Government Clarifies Position on Telecom Tariffs
The Ministry of Communications has clarified that rates of telecommunication services are decided by market forces within the framework notified by telecom regulator Trai and the government does not intervene in the free market decisions.
Notification Process for Tariff Changes
The government said any change in the tariff of mobile services is notified by telecom operators to the Telecom Regulatory Authority of India (Trai), which monitors that such changes are within the prescribed regulatory framework.
It also stated that the policies of the government and regulatory framework of Trai have resulted in one of the lowest costs for subscribers of mobile services in India. This response comes after opposition criticism of tariff hikes by private operators – Reliance Jio, Bharti Airtel, and Vodafone Idea.
Comparison with Other Countries
Sharing data of neighbouring countries and other nations like the US, UK, Australia, etc., the government highlighted that India has one of the lowest tariffs in the world for mobile services.
The government emphasized the importance of financial viability for the growth of the telecommunication sector, including investments in technologies like 5G, 6G, IoT/M2M for Industry 4.0, and ensuring subscriber interests are protected.
Comparison of Pricing
The government provided a comparison of mobile services pricing from the International Telecommunication Union (ITU) for a minimum mobile, voice, and data basket. Rates in neighbouring countries are generally higher than in India, with Pakistan having marginally lower prices. Advanced countries like the US have much higher rates.
Market Structure and Recent Developments
The government highlighted that the competition in the mobile services market in India is optimal with three private sector licensees and one public sector licensee. It mentioned the recent price increases by telcos after three years and the investments made in rolling out 5G services across the country.
According to the government, the sector has seen significant growth and improvements in mobile speed and global ranking due to these investments.
Progressive Policies for Sector Growth
The government attributed the growth and fall in rates of telecommunication services to progressive policies over the last 10 years. It also noted the transparency and efficiency in spectrum auctions, which have contributed to non-tax revenue for the government.
