Plan for everyone

Trai's direction will increase teledensity

The Telecom Regulatory Authority of India (Trai) has taken a firm stand on making no-frills services available to customers who don’t want packaged plans heavy on data. In a directive on Tuesday, the regulator asked telcos to mandatorily offer affordable vanilla services — voice and SMS plans — as an option. This puts to rest a long-drawn industry debate on whether such a choice is necessary. The industry must follow the directive without any delay to address the concern that affordable and short-duration telecom plans are in short supply.    

The Telecom Consumer Protection (13th Amendment) Regulation (TCPR), 2026, issued this week, follows a draft floated in April for consultation with stakeholders. For the past two years, ever since the release of the TCPR, 2024, the regulator observed that low-income consumers were being deprived of options in the voice and SMS category, thereby triggering action to correct the anomaly in the sector. The latest directive mandates special tariff vouchers (STVs), with lower tariffs exclusively for voice and SMS with a validity of 30 days or less, so that low-income consumers are armed with a variety of options and can recharge in accordance with their requirements. 

Even as India is on a high data-consuming path, the subscription numbers also point to the need for affordable tariff plans for a certain section. The latest telecom subscriber numbers released by Trai show the overall wireless user base at 1.28 billion as of July end, growing at a monthly rate of 0.43 per cent. While wireless subscription in urban areas was at 743.65 million, rural was at a much lower 544.27 million. The urban growth rate was 0.57 per cent against 0.24 per cent in rural areas. The teledensity — the number of telephone connections for every 100 people living in a specific area — highlights the urban versus rural gap starkly. Overall wireless teledensity in India was 90.04 per cent at the end of July. Of that, urban wireless teledensity was at 143.86 per cent against 59.59 per cent in rural. The room for growth in mobile teledensity in rural areas and some pockets of urban India can be partly filled by affordable short-duration plans, which are expected to be rolled out soon. 

The industry, while setting a goal for higher average revenue per user (Arpu) — a metric for the financial health of a telco — must keep in mind the socioeconomic development of the country. Even as telecom tariff is under forbearance — that is telcos are free to determine tariffs based on market demand and competition — Trai, as regulator, is empowered to oversee whether tariffs are transparent and non-discriminatory.  There has been resistance from telcos to offering only voice-SMS plans because data packages drive Arpu. India is considered among the cheapest in the world in terms of tariff, with its overall Arpu still languishing under ₹200 a month. With telcos’ prepaid segment comprising around 90 per cent of the total, the affordable STVs have to be built into this category. The affordable plans could possibly have short-term ramifications on Arpu. However, with data being the future of connectivity, consumers starting with basic packs now may move up the ladder before too long.