Telecom minister Scindia defends tariff hikes, says telcos deserve return on capex

Union minister Jyotiraditya Scindia

Union telecoms minister Jyotiraditya Scindia defended the recent tariff hike carried out by major operators in India and said that the country continues to have the lowest tariffs globally.

“If we expect companies, government, private sector, putting in that amount of capex, there has to be a return” Scindia said in an exclusive interview.

In June, Reliance Jio, Bharti Airtel, and Vodafone Idea raised telecom rates for various plans by 10 percent to 27 percent, effective from July.

Moreover, the minister pointed out that firms have invested Rs 4.26 lakh crore over the last three years, and the last tariff hike was seen in 2021 before the rollout of 5G.

Compared to other countries, Scindia said that a basic package that includes 70 SMSs, 2GB of data, and a number of calls costs $1.89 in India, while it costs $40 in the US. “Developed countries are priced somewhere between $12 to $35. Developing countries are priced upwards of $9. So, suffice to say that we are the cheapest in the developing world,” he said.

Explaining further, the minister said the rates have declined 97 percent from 0.53 paise to 0.03 paise, while the data costs have plunged 94 percent to Rs 59 per GB.

“So, you have a declining cost structure for consumers over a decadal period. On the other hand, you had the fastest rollout of 5G in the world, happening in India. Started in October ’22, in 21 months you rolled out for 5G across the country.”

This year there has been an 11 percent tariff. What does that mean? That means that your cost per minute has gone from 0.03 paise to 0.033 paise. Your data cost has gone from Rs 9  per GB to Rs 9.9 per GB, when it used to be Rs 287 per GB,” Scindia remarked.

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