The Indian government is determined to maintain the country’s position as the most affordable telecommunications service provider worldwide, according to Union Telecom Minister Ashwini Vaishnaw. Despite this commitment, telecom operators have faced challenges monetizing 5G services since their launch last year.
Vaishnaw expressed this during an interview at India Mobile Congress 2023, emphasizing that India’s telecom sector remains the most affordable among large economies globally. Analysts suggest that to recover their investments in 5G networks, telecom operators need an average revenue per user (ARPU) in the range of Rs 270-300 over the next three years. Currently, the ARPU in India falls between Rs 140-200, while the global average is around Rs 600-850, and in China, it’s about Rs 580.
Telecom operators have urged that certain apps, responsible for substantial network traffic, should share revenue based on their business activities in India to help offset network costs. Bharti Airtel and Reliance Jio, among the four mobile service providers, are the only ones that have introduced 5G services. Their combined investment in 5G networks is estimated at around Rs 3 lakh crore, including spectrum costs. As of now, they have not started charging for 5G data usage. Vodafone Idea, despite financial difficulties, has announced significant investments in rolling out 5G networks and expanding 4G coverage in the upcoming quarters.
Vaishnaw mentioned that BSNL is in the process of deploying a 4G network, which will be upgraded to 5G after Diwali. Responding to a query about India’s roadmap toward 6G technology, Vaishnaw noted that the Prime Minister has set a target for the Indian telecom sector to lead in 6G. The Bharat 6G Vision has been established and accepted by the International Telecom Union, a UN body responsible for defining global telecom standards. To work on 6G development, the Bharat 6G Alliance has been created, bringing together industry, academia, students, and government. Various groups, such as the antenna group, waveform group, and equipment group, are actively dedicated to developing new technology to realize the Prime Minister’s vision of India becoming a 6G technology leader.
Additionally, Vaishnaw pointed out that a second round of telecom reforms, focusing on user protection, is underway. These reforms, including initiatives like Sanchaar Sathi, aim to create a secure and trustworthy cyberworld environment. The first set of reforms, approved by the Cabinet in September 2021, introduced measures to reduce the financial burden on telecom operators and enhance liquidity in the sector. This helped telecom companies mitigate the impact of the Supreme Court’s judgment on adjusted gross revenue dues, which placed a liability of around Rs 1.53 lakh crore on older mobile phone service providers like Bharti Airtel, Vodafone Idea, BSNL, and MTNL.
