Private Cellphone Companies Extract ₹34,824 Crore from Public by Raising Annual Fees!

The Same Old “Crony Capitalism”!

In a move that has sparked widespread criticism, India’s major private cellphone companies – Reliance Jio, Bharti Airtel, and Vodafone Idea – have hiked their tariffs by an average of 15% starting from July 3, 2024. This decision impacts 109 crore of the total 119 crore cellphone users in India, leading to an additional financial burden of ₹34,824 crore annually on these consumers, as per the TRAI report dated April 23, 2024.

These three telecom giants dominate the Indian market with a combined share of 91.6%. Reliance Jio serves 48 crore users, Airtel has 39 crore users, and Vodafone Idea caters to 22.37 crore users. This oligopolistic market structure leaves little room for consumer choice, essentially trapping a vast majority of users into paying the increased tariffs.

Facts at a Glance:

1. The average monthly revenue per user (ARPU) for cellphone services in India is ₹152.55.
2. The tariff hikes, announced in late June 2024, took effect on July 3 and 4, 2024.

• Reliance Jio: Increased charges by 12% to 27%, with an average increase of 20%.
• Airtel: Increased charges by 11% to 21%, with an average increase of 15%.
• Vodafone Idea: Increased charges by 10% to 24%, with an average increase of 16%.

1. This coordinated tariff hike means that:

• Jio users (48 crore) will collectively pay an additional ₹17,568 crore annually.
• Airtel users (39 crore) will collectively pay an additional ₹10,704 crore annually.
• Vodafone Idea users (22.37 crore) will collectively pay an additional ₹6,552 crore annually.

Critical Questions Raised:

1. Why did the Modi government allow such a significant tariff hike without any regulatory oversight or consumer protection mechanisms in place?
2. Has the Telecom Regulatory Authority of India (TRAI) abdicated its responsibility towards 109 crore cellphone users by permitting these unilateral tariff increases?
3. Did the government strategically delay this price increase until after the parliamentary elections to avoid backlash and accountability?
4. Was there any study or impact assessment conducted by the government or TRAI before allowing this hike, considering the economic burden it imposes on consumers?
5. How did all three companies arrive at similar average tariff increases despite differing financial positions and investment needs? Is there an element of collusion that the government is ignoring?
6. Is the Modi government failing to act as an active trustee for the public good, as mandated by the Supreme Court in the “Delhi Science Forum vs. Union of India” case?

These questions underscore a growing concern among the public and opposition leaders like Randeep Singh Surjewala, who accuse the Modi government of perpetuating crony capitalism at the expense of ordinary citizens. The government must address these issues and ensure that consumer interests are safeguarded against unchecked corporate profiteering.