Sunday, 13 Oct, 2024
It is quite possible that mobile phone usage could have remained the preserve of the rich but for one pragmatic policy change in 1999
On the very first day of auctions on July 26, 2022, companies have committed bids worth Rs 1.45 lakh crores for spectrum to run 5 G services. By the time the auction is closed on August 15, it is estimated to attract about Rs 4.5 lakh crore in bids. Analysts who are familiar with the telecom sector feel that 5 G services will trigger yet another telecom revolution in India; on a scale ordinary Indians cannot even comprehend right now. To begin with, 5G offers speed that is 10 times faster than what 4G currently offers. The difference this will make to usage of smart phones could well be envisaged. For telecom users, 5G speeds could dramatically change both quality and productivity of work as well as leisure and entertainment. With the government simultaneously giving a massive push to the use of internet in local Indian languages through another digital initiative called Bhashini; there is little doubt that transformational change is just round the corner. The three big telecom companies, Reliance Jio, Airtel and Vodafone-Idea are planning to launch 5G services in metros like Delhi, Mumbai, Bengaluru and Chennai by the time the festive season is in full swing in October, 2022.
Young Indians are so used to using smart phones that they often don’t realise that mobile phones were first used in India just 27 years ago in 1995 and remained the preserve of the rich for almost a decade because usage costs were exceptionally high. For instance, when mobile services were launched in 1995, the cost of an outgoing call was Rs 24 per minute and incoming call was Rs 16 per minute. Such charges are incomprehensible for consumers who now make free calls using What’s App. In fact, it is quite possible that mobile phone usage could have remained the preserve of the rich but for one pragmatic policy change in 1999. As the accompanying chart below shows, that single policy change resulted in the number of mobile phone subscribers in India leapfrogging from about 3 million at the beginning of this century to about 1160 million now
When mobile spectrum was first auctioned in 1995, telecom companies had to pay a fixed amount as license fee every year. Overambitious bidding back then had resulted in a situation where the annual license fee commitments were exceedingly high. To make up, telecom companies charged exorbitant rates for phone calls. This in turn prevented the majority of Indians from being able to afford this new technology. In 1999, the government abandoned the annual license fee and asked telecom companies to share a fixed portion of revenue instead. The rest is history. In just six years so, the number of subscribers shot up to 100 million; it crossed 500 million in about 10 years and 1,000 million in about 15 years. Who knows what further changes 5G services will trigger?
