Government Clarifies India's Mobile Rates Among Lowest Globally After Criticism

The government clarified on Friday that India's mobile services market is driven by demand and supply, with three private telecom companies and one public sector player offering some of the lowest tariffs globally. This statement came after the Congress criticised recent mobile tariff hikes by the top three companies, questioning the lack of oversight and regulation.

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Government's Response to Criticism

The Union Ministry of Communications countered the Congress's claims, stating that for the past two decades, mobile service rates have been under forbearance by the Telecom Regulatory Authority of India (TRAI). The ministry highlighted that government policies and regulatory frameworks have resulted in low costs for mobile subscribers in India.

To support its point, the ministry provided a comparative chart showing prevailing prices in countries like the US, Australia, the UK, and Russia. In India, an average price of USD 1.89 per month offers practically unlimited voice calls and 18 GB of data, which is significantly lower than rates in other markets.

Market Dynamics and Tariff Regulation

The ministry emphasised that India's mobile services market operates through market forces of demand and supply. It consists of three private sector players and one public sector player, which it described as an optimal market structure from a competition perspective. The rates are determined by market forces within the regulatory framework set by TRAI.

The government does not interfere in free market decisions as tariffs are under forbearance, according to the statement. The ministry also noted that telecom service providers (TSPs) have increased prices after more than two years.

Investment in Technology

In the last two years, some TSPs have invested heavily in rolling out 5G services across India. This has led to a significant increase in median mobile speed to 100 Mbps and improved India's international ranking from 111 in October 2022 to 15 currently.

The ministry stressed that protecting subscribers' interests while ensuring orderly growth and financial viability is crucial. Investments in technologies like 5G, 6G, IoT/M2M for Industry 4.0 are essential for this growth.

Historical Context

Before the last decade, the telecommunication sector faced controversies and lacked transparency, leading to stagnant growth. Over the past ten years, progressive government policies have caused telecommunication service rates to fall exponentially for both voice and data services.

The government has also benefited from substantial non-tax revenue through transparent and efficient spectrum auctions. This transparency has contributed to the sector's growth and stability.

In summary, India's mobile services market is regulated by TRAI with minimal government intervention. The recent tariff hikes are part of a broader strategy to ensure financial viability while continuing to offer low-cost services compared to global standards.