Telecom Tariff Hike Clarified: Ministry of Communications Addresses Misleading Claims

New Delhi, July 5, 2024 – The Ministry of Communications (Department of Telecom) has addressed recent misleading claims regarding an increase in mobile service tariffs. The Ministry emphasized that the current market, which includes three private sector players and one public sector player, operates based on market forces of demand and supply, with the primary focus on protecting subscriber interests, fostering orderly growth, and ensuring financial viability.

According to the Telecom Regulatory Authority of India (TRAI) Act of 1997, TRAI regulates telecommunication service rates. For the past two decades, mobile service rates have been under forbearance, leading to some of the lowest mobile service costs worldwide. For instance, a typical mobile service package in India, which includes 140 minutes of voice, 70 SMS, and 2GB of data, costs an average of USD 1.89 per month, offering practically unlimited voice and 18GB of data.

Comparatively, mobile service costs in neighboring countries and other advanced economies are significantly higher. For example, the cost in China is USD 8.84, while in the USA, it is USD 49.

The Ministry highlighted that mobile service rates are determined by market dynamics within the regulatory framework set by TRAI. The government does not interfere with these market decisions, as they fall under TRAI’s domain. Notably, the recent tariff increase is the first in over two years, during which telecom service providers (TSPs) have invested heavily in rolling out 5G services, boosting median mobile speeds to 100 Mbps and improving India’s international ranking from 111 in October 2022 to 15.

The Ministry reiterated the importance of financial viability for continued investment in advanced technologies like 5G, 6G, IoT, and M2M for Industry 4.0, while ensuring subscriber interests and sector growth.

In the past decade, the telecom sector has seen exponential growth in service affordability due to the government’s progressive policies, resulting in significant non-tax revenue from transparent spectrum auctions.

For more detailed information, please visit the official Press Information Bureau (PIB) release here.

Source: PIB Delhi