BRIDGING TELECOM REVENUE DISPARITY

The phenomenal surge in data consumption during the past decade has not translated into matching revenues for telecom operators. What should they do to ensure a sustainable and profitable future for the industry?

-  Ashish Sinha

THE INDIAN telecommunications industry is undergoing a fundamental transformation, driven by an unprecedented surge in data consumption. Over the past decade, India’s per capita data consumption has skyrocketed, rising an astonishing 288fold. This explosive growth is largely driven by the widespread affordability of smartphones, the rapid expansion of 4G and 5G networks, and the rise of large traffic generators (LTGs). With the Covid-19 pandemic fuelling further reliance on digital platforms, monthly data consumption per user has ballooned from a modest 60 MB in 2013 to an extraordinary 17,360 MB by 2023.

However, despite this massive increase in data usage, the average revenue per user (ARPU) has inched up by only 1.25 times. The cost per gigabyte of data has remained stagnant at approximately Rs 10 since 2018, revealing a deep disconnect between consumer demand for data and the financial returns for telecom service providers or TSPs. This growing disparity presents a significant challenge to the long-term sustainability of the telecom sector.

A recent study by the Centre for Digital Economy Policy Research (CDEP.org) offers an insight into these emerging trends, shedding light on the increasing pressure faced by TSPs as data traffic grows exponentially, outpacing revenue growth. Jaijit Bhattacharya, Founder and President of CDEP, underscores the dilemma: “TSPs may have to choose between slowing network speeds or raising prices for all customers, even those who don’t rely on data-heavy services. This not only affects user experience but also threatens the ‘Digital India’ vision of affordable internet for everyone.”

What’s the Solution?