The percentage of per capita gross national income (GNIpc) is the dollar-value of a nation’s final income in a year divided by its population. So, the lower the telecom tariff as a percentage of GNIpc, the more affordable the services in that country. Now, analysts and industry executives have noted that India’s telecom tariffs are amongst the lowest in the world and telecom providers in the country “have enough headroom to raise prices.”
As per macro data collated by the International Telecom Union (ITU) (seen by Economic Times) and the World Bank, when compared amongst nations with a GNIpc of less than $10,000, India’s telecom tariffs are the second lowest at 1.11% of GNIpc after Brazil’s 0.92%. The data shows when compared to India, telecom tariffs are much higher in South Africa (3.49% of GNIpc), Thailand (2.92%), the Philippines (2.32%), Indonesia (1.71%), Egypt (1.6%), and Bangladesh (1.4%).
In terms of plan prices, India’s telecom services tariff is the lowest in the world at $2 per month. On the other hand, Brazil’s telecom tariff is significantly higher at $6.1 per month, ITU data suggests. The monthly telecom tariffs of other key economies like China ($6.2), Philippines ($6.6), Malaysia ($9.2), US ($43.6), Thailand ($15.8), Mexico ($10) and South Africa ($19) are much higher than that of India. The data also showed that even Bangladesh’s monthly telecom services tariff at $2.9 is higher than India.
In a research note that analysed ITU and World Bank data, ICICI Securities said: “Indian telecom tariffs are the most affordable in the world as per ITU database, which gives us the comfort that the country’s telecom services providers can increase rates by at least 1.5x over the next 4-5 years even as minimum data requirements grow, and still maintain the status of being the most affordable.”
Why telecom tariffs in India may increase in 2024
Major telecom operators like Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) are expected to increase in 2024. Analysts said that both Jio and Airtel are set to complete pan-India rollouts of their 5G services soon. Meanwhile, Vi’s 5G rollout start is still pending as the telco is yet to close its fundraiser.
Analysts at ICICI Securities also said that telecom tariffs in India have historically been inelastic. Despite the surge in overall data subscriber adoption and data consumption, the tariffs of popular mobile plans have risen only 2x since July 2017.
As per macro data collated by the International Telecom Union (ITU) (seen by Economic Times) and the World Bank, when compared amongst nations with a GNIpc of less than $10,000, India’s telecom tariffs are the second lowest at 1.11% of GNIpc after Brazil’s 0.92%. The data shows when compared to India, telecom tariffs are much higher in South Africa (3.49% of GNIpc), Thailand (2.92%), the Philippines (2.32%), Indonesia (1.71%), Egypt (1.6%), and Bangladesh (1.4%).
In terms of plan prices, India’s telecom services tariff is the lowest in the world at $2 per month. On the other hand, Brazil’s telecom tariff is significantly higher at $6.1 per month, ITU data suggests. The monthly telecom tariffs of other key economies like China ($6.2), Philippines ($6.6), Malaysia ($9.2), US ($43.6), Thailand ($15.8), Mexico ($10) and South Africa ($19) are much higher than that of India. The data also showed that even Bangladesh’s monthly telecom services tariff at $2.9 is higher than India.
In a research note that analysed ITU and World Bank data, ICICI Securities said: “Indian telecom tariffs are the most affordable in the world as per ITU database, which gives us the comfort that the country’s telecom services providers can increase rates by at least 1.5x over the next 4-5 years even as minimum data requirements grow, and still maintain the status of being the most affordable.”
Why telecom tariffs in India may increase in 2024
Major telecom operators like Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) are expected to increase in 2024. Analysts said that both Jio and Airtel are set to complete pan-India rollouts of their 5G services soon. Meanwhile, Vi’s 5G rollout start is still pending as the telco is yet to close its fundraiser.
Analysts at ICICI Securities also said that telecom tariffs in India have historically been inelastic. Despite the surge in overall data subscriber adoption and data consumption, the tariffs of popular mobile plans have risen only 2x since July 2017.
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