Telecom operators Reliance Jio, Bharti Airtel and Vodafone Idea recently increased their mobile tariffs. This sudden surge in charges could 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 at IIIT, Bengaluru to know more about the impact of the increase in mobile tariffs. 

Sridhar says that while the country boasts some of the world’s cheapest data plans, the increase could disproportionately burden rural users with lower disposable incomes and limited access to broadband alternatives. This potential widening of the digital divide highlights the need for a nuanced approach. 

Affordability is certainly a key factor, but it cannot exist in a vacuum. The current state of mobile broadband service in India suffers from quality issues, particularly in terms of infrastructure. Upgrading backhaul connections is crucial for a robust digital economy. Additionally, high reserve prices for sub-gigahertz spectrum discourage telecom companies from expanding rural coverage, further hindering accessibility. 

The impact on social media usage and app consumption is likely to be moderate, with users potentially allocating a larger share of their budget towards internet access. However, small and medium enterprises (SMEs) that heavily rely on digital platforms could face challenges. Captive Non-Public Networks (CNNs) within enterprises might offer a solution, but a clear policy for spectrum allocation for CNNs is needed. 

He also added that the impact on cashless transactions via UPI might be felt by SMEs as well, but the effect on individual users remains unclear. Ultimately, fostering a thriving digital ecosystem in India requires a three-pronged approach: maintaining affordability, ensuring quality of service through infrastructure upgrades, and promoting widespread accessibility through initiatives like Bharat Net. Only by striking this balance can India bridge the digital divide and unlock the full potential of its digital economy. 

Listen to the podcast to know more. 

(Host & Producer: Anjana PV)

About the State of the Economy podcast 

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups 

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