The Supreme Court has dismissed a plea seeking regulation of internet prices in India, according to an Economic Times report. This decision follows the price hikes implemented by the three major private telcos in India—Reliance Jio, Bharti Airtel, and Vodafone Idea (Vi)—in July 2024.
The court advised the petitioner that, instead of relying on private players for internet services, he could opt for public telcos like BSNL and MTNL. When the petitioner argued that Reliance Jio and Bharti Airtel dominate the market, the Supreme Court clarified that if he suspected cartelization, he could seek recourse from the Competition Commission of India (CCI). As of November 2024, Jio has 476.58 million broadband connections, Airtel has 289.31 million, and Vi has 124.79 million. BSNL trails far behind, with only 36.92 million broadband connections.
Why it matters:
This petition comes at a time when the telecom companies are thinking about another round of price increases. In its earnings call for the quarter ending on December 31, 2024, Vi CEO Akshay Moondra stated that the telecom industry should increase prices again in 2025.
Moondra explained that the industry needs a pricing model where heavy data users contribute more for their data usage. This, he argued, would ensure that telecom services remain affordable while allowing telcos to recover their investment costs. He further added that while overall charges for heavy data users can be higher, they should pay less per GB as they consume more data.
Is there ground to be concerned about tariff increases?
In India, telecom prices (or tariffs) fall under the regulatory purview of the Telecom Regulatory Authority of India (TRAI). Under the Telecommunication Tariff Order of 1999, telecom companies must report any new tariff for telecommunication services to TRAI within seven working days of implementing said new tariff. The regulator also holds the authority to review and modify the tariff of any telecommunication service or a part of it.
According to a Business Standard report, TRAI completed its assessment of the tariff hikes in August 2024 and concluded that they did not violate the tariff order. The regulator concluded that telcos’ price increases were fair and not predatory in nature.
Is BSNL a viable alternative for internet access?
Another aspect to consider here is whether BSNL would be a viable option for customers to tackle the current or future tariff hikes. Following the July 2024 hike, BSNL experienced an influx of subscribers, primarily at Vi’s expense.
In Q2FY25 which ended on September 30, 2024, Vi lost 5.1 million subscribers to BSNL, however, the company predicted that these subscribers would come back because Vi offers them better coverage and a 4G experience. This eventually ended up being true, with Moondra stating that the net port-ins from BSNL increased between June 2024 and January 2025.
While Airtel and Jio have already rolled out 5G services, and Vi is in the process of establishing its 5G network, BSNL has yet to expand its 4G coverage nationwide. According to a CNBC TV 18 report, BSNL plans to achieve nationwide 4G coverage by June 2025 and begin introducing 5G services in early 2025. So far, the public telco is yet to catch up with its private competitors’ services making it a less viable option for telecom customers.
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