Mobile Data Prices in India Could Soon Become 10x More Expensive

The higher cost of data is likely to help Indian telcos pay their existing dues and run operations without issues.

Indian mobile users could soon be shelling out more for data access.

(Photo: iStock)

Indian mobile users have enjoyed the cheapest mobile data rates in the world for a few years now, but that could soon come to an end.

Currently, mobile subscribers in India get access to 4G data at a price as low as Rs 3.5 per GB. But, if the floor price (minimum rates) is fixed as demanded by telecom operators, the mobile internet prices will rise 5-10 times from the current level.

Debt-ridden Vodafone Idea has proposed that the minimum price of data should be fixed at Rs 35 per GB, Bharti Airtel has proposed minimum price of Rs 30 per GB for low data users and Reliance Jio wants it to be priced gradually to Rs 20 per GB.

Niti Aayog CEO Amitabh Kant has come out in support of fixing minimum rates for mobile calls and data, saying there is no other option due to heavy debt of the telecom sector and an unsustainable fall in prices.

At present, telecom companies are free to decide on call and data rates, but due to stiff competition they have sought regulatory intervention.

Kant's stand comes days after Niti Aayog showed discomfort in its official response submitted to telecom regulator Trai on fixing floor price for phone calls and data prices to bail out telecom companies.

Hike to Pinch User’s Pocket

The cheapest data rate of Rs 3.5 per GB is offered in a plan priced at Rs 599 with 84 days validity that offers up to 2GB data per day at 4G speed. The same plan will cost Rs 3,360-5,880 if the regulator accepts the proposal from telecom operators to price the data in the range of Rs 20-35 per GB.

The Telecom Regulatory Authority of India (TRAI) is holding a consultation with interested parties over fixing a minimum price for call and data services following demand from the industry.

However, the Competition Commission of India (CCI) in its submission has said setting a floor price for mobile services is a regressive step that may have a detrimental effect on market competition.

"No mature jurisdictions have imposed price floors on crucial sectors like telecom. Such retrograde regulatory measures bring inefficiencies in the longer run," CCI had said.

And while Kant extended strong support for setting up floor price, he said it is not a long-term solution.