New Delhi, August 29th, 2024: The Centre for Digital Economy Policy Research (C-DEP.org), a prominent think tank dedicated to fostering the growth of India’s digital economy, has unveiled its latest report, titled ‘Analysis of Telecom Revenue Frameworks Amid Increasing Data Traffic’. This thorough analysis investigates various revenue frameworks aimed at addressing the imbalance between the significant investments made by Telecom Service Providers (TSPs) in telecom infrastructure and the inadequate revenue generated from these investments.
In the last decade, average data consumption per user in India has soared by an astounding 288 times, attributed to the widespread availability of affordable smartphones, the expansion of 4G and 5G networks, as well as the emergence of Large Traffic Generators (LTGs). These LTGs are responsible for an overwhelming amount of data flow, which is currently placing immense pressure on existing infrastructure.
Conversely, during this period, the Average Revenue Per User (ARPU) has only seen a modest increase of 1.25 times. This stark contrast highlights the significant disadvantage faced by TSPs. As they continue to invest substantially in expanding and maintaining their network infrastructure to accommodate the surging data demands of LTGs, the limited revenue growth exacerbates the challenges posed by this unfair revenue regime.
C-DEP.org’s report further explores the escalating cumulative deficit that TSPs encounter alongside the rising data consumption, primarily driven by LTG platforms. These entities—such as video streaming and social media platforms as well as cloud storage providers—generate substantial data traffic yet contribute nothing towards the costs of network expansion. This financial burden falls entirely on TSPs, which have also experienced a notable decline in SMS revenue due to a shift toward online messaging applications.
Dr. Jaijit Bhattacharya, President of C-DEP.org, emphasizes that “the report reveals a growing gap between the investments in telecom networks, driven by the exponential surge in data traffic, and the limited growth in revenue. This disparity can be mitigated through the implementation of a Fair Share Framework, ensuring that LTGs contribute appropriately to the costs associated with network sustainability and expansion.”
The proposed Fair Share Framework requires that LTGs contribute to infrastructure costs based on the incremental traffic generated by their services beyond a pre-established baseline. This approach aims to safeguard smaller startups and Micro, Small, and Medium Enterprises (MSMEs) from undue financial pressures.
Additionally, the framework laid out in the C-DEP.org report is designed with the goal of maintaining low costs for consumers in India and adheres to net neutrality principles, thus ensuring equitable access to the internet for all users. The comprehensive report is available for public access at https://www.c-dep.org/reports.
About C-DEP.org: The Centre for Digital Economy Policy Research (C-DEP.org) is an autonomous think tank focused on promoting India’s technology-led economy and enhancing domestic industries through meticulously researched and inclusive policy suggestions, aimed at boosting the country’s manufacturing capacity through suitable policy and fiscal interventions.
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