Affordable Telecom Services Key to India’s Telecom Growth
Ashwini Vaishnaw, India’s Union Telecom Minister, has expressed the government’s commitment to ensuring that India’s telecommunications services remain the most affordable globally. This declaration comes as the telecom sector grapples with the challenge of monetizing 5G services since their launch last year, as noted by the Cellular Operators Association of India, a telecom industry body.
In an interview conducted at the India Mobile Congress 2023, Minister Vaishnaw emphasized the government’s perspective, stating, “From the government side, we are very clear. We would like telecom service to continue to remain the most affordable in the entire world, and today, among all large economies, India’s telecom sector is the most affordable.”
The quest for affordable telecom services aligns with the government’s vision to make this essential service accessible and cost-effective for the masses. India’s current average revenue per user (ARPU) stands in the range of Rs 140-200, significantly lower than the global average of Rs 600-850 and about Rs 580 in China.
Analysts suggest that telecom operators need to achieve an ARPU in the range of Rs 270-300 over the next three years to offset the substantial investments made in building 5G networks. Achieving this balance between affordability and sustainability is essential for the sector’s growth.
Telecom operators have put forth a proposal that applications responsible for generating substantial network traffic should contribute revenue shares based on their business activities in India. This approach aims to compensate for the network operating costs incurred by telecom providers.
As of now, Bharti Airtel and Reliance Jio are the only two out of four mobile service providers that have rolled out 5G services. Their combined investment in 5G networks, including the cost of spectrum, is estimated to be around Rs 3 lakh crore. Notably, these companies have not initiated charges for 5G data usage, indicating a strategic approach to market penetration.
In a significant development, Kumar Mangalam Birla, non-executive additional director of Vodafone Idea, announced the company’s intention to make substantial investments in deploying a 5G network and expanding 4G coverage in the upcoming quarters. This commitment underscores the industry’s efforts to embrace the 5G era.
Furthermore, Minister Vaishnaw shared insights into the roadmap for India’s progression toward 6G technology. He highlighted that the Prime Minister has set an ambitious target for India’s telecom sector to take a leadership role in 6G. The Bharat 6G Vision has been established and endorsed by the International Telecom Union, a United Nations body responsible for establishing global telecom standards.
The minister emphasized the formation of the Bharat 6G Alliance, comprising industry stakeholders, academia, students, and government entities, to collaborate on 6G technology development. Various working groups, including the antenna group and equipment group, are diligently working to advance the technology.
Vaishnaw expressed optimism about India emerging as a leader in 6G technology, aligning with the visionary goals set by the Prime Minister.
Additionally, the minister highlighted a second set of telecom reforms aimed at enhancing user protection. These reforms are part of a series of initiatives that focus on customer protection, and ensuring the cybersecurity of the telecom sector.
The government’s continuous efforts to balance affordability, innovation, and user protection underscore its commitment to the telecom sector’s growth and the welfare of consumers. These initiatives aim to secure India’s position as a global leader in telecommunications.