India has arguably the lowest Internet data rates in the world, as low as 10 Indian Rupees (about 6 U.S. cents) per one GB (gigabyte) per day.
This is due to intense competition among telecom service providers.
The competition was triggered by a provider “Reliance Jio” which launched ‘4G’ broadband services a year ago offering the lowest prices. Soon other service providers followed suit and slashed their data rates to match and survive in the competition.
Prior to Reliance Jio’s “4G” revolution, Indians had to bear with the “2G” and “3G” services at a much higher cost.
Till a year ago, a subscriber using Internet data round-the-clock had to shell out around 1500 Indian Rupees (about 23 U.S. dollars) per month for nearly one GB data per day, which, thanks to Reliance Jio, has come down to the cost of 500 Indian Rupees (about 8 U.S. dollars) for three months, including voice calls, per one GB data per day.
According to estimates, presently there are nearly 500 million Internet users in India. Access to the Internet is one of the major parameters that can directly impact gross domestic product (GDP) growth. For every 10 percent increase in Internet penetration for a country like India, GDP is conservatively projected to grow between 1.0 and 1.8 percent.
A report released by the Telecom Regulatory Authority of India (TRAI) in December 2017 suggested that Reliance Jio, Airtel, Vodafone, Idea Cellular and BSNL together constituted 93.80 percent of market share of the total broadband subscribers.
Reliance Jio then had the maximum number of subscribers at 160.09 million, followed by Airtel at 71.09 million. As per TRAI data released in April 2018, in terms of market share, Reliance Jio enjoys the highest of it at 45.18 percent, whereas Airtel has a market share of 20.47 percent. Vodafone, Idea Cellular and BSNL have market shares of 14.17 percent, 9.82 percent and 5.36 percent, respectively.
India is presently the second largest telecom market in terms of subscribers base in the world, only after China. The country’s telecom industry contributes directly to 2.2 million employment and indirectly to 1.8 million jobs. Also, it contributes 6.5 percent to India’s GDP, and is the highest contributor in foreign direct investment (FDI) in the last two decades, at 1307 billion Indian Rupees (about 19.6 billion U.S. dollars).
There would be 900 million smartphone subscribers by 2023 and smartphone traffic is expected to grow 11 times to 14 exabytes (EB) in another five years, says the latest annual report by the Cellular Operators Association of India (COAI).
A report by the Internet and Mobile Association of India (IAMAI) said that the number of Internet users stood at 481 million in December 2017, an increase of 11.34 percent over December 2016, said the report titled “Internet in India 2017”.
Urban India with an estimated population of 455 million already has 295 million using the internet. Rural India, with an estimated population of 918 million as per 2011 census, has only 186 million internet users, leaving out potential 732 million users in rural India.
COAI director general Rajan Mathews says the cheap Internet data rates has proved to be a boon for the consumers, but all the service providing companies have been losing money because of intense competition amongst themselves.
He further adds that the price war of Internet data among telecom service providers has also led to a boom in the smartphone market. Smartphones have become quite affordable and even the poorest of the poor can afford to buy.
About the possibilities of Internet data rates rising in the near future in oligopoly-like conditions, Mathews says “I don’t think there will be a price hike in Internet data in India, because if it happens, the service providers know well that the customer base will shrink.