Editorial: Inclusivity of airwaves

CHENNAI: The recently-held spectrum auction ended with a whimper as the Centre’s realisation from the 2024 auction worked out to just about 12% of the Rs 96,238 crore minimum value that it had estimated for the spectrum on offer. However, the damp squib has not deterred the spirit of the telecom department officials, who have maintained that this was in line or even slightly above expectations, given that the earnest money deposits (EMDs) by telcos just ahead of the auction gave a clear indication of the extent of participation and sale. Further, almost 99 per cent of the spectrum on the block did not see much interest, as telcos had already picked up spectrum in those specific bands in the last auction conducted in August 2022.

Reliance Jio, Bharti Airtel and Vodafone Idea have opted to increase the call and data tariff by up to 10-25% across prepaid and postpaid plans. The new rates were said to be coming into force this week. One might recall that this tariff hike is the first major jump in rates enforced since November 2021. Industry evangelists and company spokespersons have justified the hike on account of building a financially sustainable business model. The tariff hike will also contribute towards robust investments in network upgradation, as well as rolling out 5G infrastructure in more parts of the country.

One could argue that maybe it’s about time for a price hike on the mobile front, considering India has probably one of the cheapest data tariffs globally. Currently the cost of 1GB of data hovers around $0.2, a threshold shared by a handful of nations. Having tasted blood, Indian consumers have developed a gargantuan appetite for data — about 24 GB data per month/per individual. As per a report, the urban spend on mobile services, which constitutes 2.7 per cent of household expenditure in FY24 is expected to go up to 2.8 per cent in FY25. Rural consumers are not far behind as their estimated spend is to surge to 4.7 per cent in FY25, compared to the 4.5 per cent spend in FY24.

These numbers should be viewed in the context of overall internet penetration in India, considering that a huge segment of the nation is reliant on internet access purely through their smartphones, essentially highlighting the contribution of mobile internet providers in the scheme of things. Last year, internet penetration grew eight per cent year-on-year. Currently, India has over 820 mn active internet users. Over 50% of them, i.e. 442 million, hail from rural regions. As the number of active internet users in rural India exceeds that of urban users, telecom service providers should consider tailoring their tariffs in an even more hyper-local manner, to take advantage of the services people really use.

While the industry could rejoice knowing that the number of non-active internet users are declining, it must be noted that around half of rural India is still not active. Tellingly, here in Chennai, BSNL just rolled out the erstwhile ‘hot’ technology of 4G services, in the city. This development is a clear indicator of the infrastructural chasm dividing deep-pocketed private operators and state-owned service providers like BSNL and MTNL. Needless to say, the dream of Digital India might bear fruit only through the wellspring of access. Gatekeepers like high tariffs could wait a while.