Surprised by telecom tariff hike?

It is India’s fortune that internet charges are among the cheapest in the world.

If Indian telecom companies had continued the way they were going, all of them would have ended up on the cover of Agatha Christie’s crime thriller, ‘And Then There Were None’—dead and buried like the ten strangers in the whodunit. But, since nothing focuses the mind better than the sound of impending doom, they have set about the task of reviving their fortunes through price hikes.

Though consumers will crib and cry for a few days, they would realise that an across-the-board hike in calling rates and data charges was the only way to keep the telecom industry from going belly-up. Dirt-cheap rates, cut-throat competition and a disastrous race to assured destruction had already wiped out several big players and left the private sector navratnas like Airtel, Idea, and Vodafone in heavy debt. A few more quarters of low-tariffs would have wiped the market clean of players.

It is India’s great fortune that mobile and internet charges are among the cheapest in the world—primarily because of the demographic dividend and high density of population in many states. Till the prices were hiked, most Indians were paying just around Rs 150 for a month’s phone calls and 45 GB of data. This was—consider the absurdity— less than what people pay for a week’s supply of onions today! Just for the sake of comparison, bear in mind that in a developed country like England, every GB of data on the phone costs almost Rs 400. The average global cost of data per GB is a staggering Rs 600.

There would, of course, be exaggerated fears of tariffs becoming ridiculously high, like in the early days of mobile phones when receiving a call for a minute lightened the wallet by Rs 10-15. Or, when long-distance calls made from landline phones (remember those STD booths?) averaged Rs 20-30 during peak hours.

But, the deep penetration of mobiles—India has 430 million users of smart phones—makes the country a viable market for the volumes game. Tariffs will continue to remain low, provided it doesn’t turn into a monopoly. For phones to survive, the title of the telecom story has to be—And there was more than one.

There is, of course, the hidden advantage of higher tariff acting as a deterrent, leading to lesser ‘screen time’. There is mounting evidence to support calls for helping people get over their dependence on mobiles, a syndrome that has even pioneered a name for it—nomophobia.  Though the current hike is meant to save telecom companies, it may accidentally end up helping humanity save some precious time for healthier pursuits. Ring it on, then!