Telecom operators Reliance Jio, Bharti Airtel and Vodafone Idea have recently increased mobile phone tariffs. This steep rise in tariffs is likely to impact customers and businesses. In this State of the Economy podcast, BusinessLine’s Anjana PV speaks to Dr. V. Sridhar, Professor, Centre for IT and Public Policy, IIIT, Bangalore, to elaborate on the impact of the mobile phone tariff hike.
Sridhar said that while India boasts some of the cheapest data plans in the world, the price hikes could disproportionately burden rural users who have lower disposable income and limited access to broadband alternatives, highlighting the need for a nuanced approach as a potentially widening digital divide emerges.
While affordability is certainly an important factor, it is not enough. The current state of mobile broadband services in India suffers from quality issues, especially in terms of infrastructure. Upgrading backhaul connectivity is essential for a robust digital economy. Moreover, high reservation prices for sub-gigahertz spectrum prevent telcos from expanding their reach in rural areas, making access even more difficult.
The impact on social media use and app consumption is likely to be moderate, and users may allocate a larger portion of their budget to internet access. However, small and medium-sized enterprises (SMEs) that rely heavily on digital platforms may face challenges. Captive private networks (CNNs) within enterprises could be a solution, but clear policies on spectrum allocation for CNNs are needed.
He added that UPI’s impact on cashless transactions may also extend to small and medium-sized enterprises, but the impact on individual users is unclear. Ultimately, revitalizing the digital ecosystem in India requires a three-pronged approach: maintaining affordability, ensuring quality of service through infrastructure upgrades, and promoting widespread access through initiatives such as Bharat Net. Only by striking this balance can India close the digital divide and realize the full potential of its digital economy.
Listen to the podcast for more details.
(Host and Producer: Anjana PV)
About the State of the Economy Podcast
The Indian economy has been hailed as a bright spot in the gloomy mood that seems to be gripping the rest of the world. But some sectors remain stagnant while others seem to be firing on all cylinders. To make sense of the country’s mass of contradictions, Business Line brings you podcasts from experts across a range of sectors, from finance, marketing, technology to start-ups.
