Could broadband fees be reduced in India?

Could broadband fees be reduced in India?

According to Bloomberg and recent Indian news reports, the country is looking at proposals to reduce the license fee for fixed-line broadband services to households.

If the plan went ahead, broadband service providers would benefit from a much lower license fee on the adjusted gross revenue earned from households for providing fixed-line broadband services. 

Figures as low as one rupee a year ($0.013) have been mentioned, though no change has been proposed for services provided to commercial users, including large corporations and business establishments

While this would undoubtedly boost companies offering broadband (such as telecoms giants Reliance Jio Infocomm, Bharti Airtel and Vodafone Idea, along with hundreds of ISPs), the effect on consumers would also be interesting. A boost in access and lower cost for internet services could help the spread of fixed-line broadband services – not to mention encouraging working from home, a trend that has grown since the recent coronavirus epidemic and lockdown.

The proposals assume that government losses would be more than outweighed by gains from increased digital access, and it has certainly long been assumed that increases in fixed-line broadband penetration can boost GDP. 

However, India has, according to some estimates, only 19 million fixed line broadband users – a figure made up of enterprises and offices and 17 million home fixed line broadband users. There are over 640 million mobile broadband users. Essentially, India needs more fibre.

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