Telecom tariff hike won’t hurt: Government

The government has dispelled the notion that the recent tariff increases by private telecom operators will hurt consumers, saying data and voice calls will be the cheapest in the world and lower than what they were four years ago.

The three operators increased prices of prepaid plans up to 40% or so on Sunday to shore up revenue and increase profitability.

According to top government officials who spoke on the condition of anonymity, the average wireless data price is expected to increase to Rs. 16.49 per GB by 2019 end after the tariff hike — still the cheapest in the world. Outgoing calls would cost an average 18 paise per minute compared with 13 paise in March, they said.


Information technology minister Ravi Shankar Prasad on Monday tweeted that the Narendra Modi-led NDA government had inherited high mobile internet cost — as much as Rs. 268.97 per GB in 2014 — from the UPA regime.

Citing data from cable.co.uk, Prasad tweeted that India’s mobile internet rate per GB is the lowest in the world. “Now it is Rs. 11.78 per GB, as per Trai.”

The minister’s comments followed All India Congress Committee spokesperson Pawan Khera’s remarks on Sunday that private operators were set to gain .Rs. 36,000 crore every month from the tariff increases.

Analysts said the tariff increase would be the biggest in India’s telecom industry, with the end of free voice services in most plans.

The government nudged Reliance Jio Infocomm, Bharti Airtel and Vodafone Idea to bite the bullet after a prolonged price war since 2016 damaged industry finances and hurt the state’s revenue.

Vodafone Idea and Airtel increased rates only for prepaid subscribers, who account for over 90% of the user base, starting December 3. Price increases by Jio, which caters to 355 million customers, will be effective from December 6.

Khera questioned the government’s decisions to allow private operators to increase prices on the one hand and give them a twoyear moratorium on spectrum-related payments, including interest and penalties, on the other.

Analysts said higher tariffs would improve the financial health of the telecom sector and help these telcos increase their respective average revenue per user.

“Telecom players have recognised hyper-competition and have put corrective measures in place, which is the first step towards moving to financial health while they continue to work with the government to see the additional areas where health of the sector can be improved,” Rajan S Mathews, directorgeneral of the Cellular Operators Association of India, told ET.

He said the Supreme Court-mandated statutory dues base on adjusted gross revenue are to be made by January-end and the industry had to do something significant to get those funds. Vodafone Idea and Airtel are the worst affected by the court’s ruling on AGR.