India’s telecom has the distinction of being the cheapest in global circles for a decade. At roughly 8-9 ¢ (US cents) per gigabyte, an Indian consumer pays a fraction of what a German, American, or Brazilian user pays. Our prime minister has, with justified pride, told global audiences that a gigabyte of data here costs less than a cup of tea. It is a genuine achievement — the product of the 4G-led disruption of 2016 and a policy environment keeping tariffs astonishingly low. Cheap mobile broadband has transformed India’s digital landscape, enabling everything from UPI and digital public infrastructure to online education, telemedicine, and the platform economy.
Even as India basks in its reputation of having the world’s cheapest mobile data, subscribers are bracing for a familiar sequel. Tariffs jumped by as much as 25% in 2024 and telecom operators, according to analysts, are once again reportedly readying a 15-20% hike.
Our policy conversation has to urgently consider affordability relative to income, or cost as a share of what people earn. A country may offer the world’s lowest mobile tariffs in absolute dollar terms while still imposing a relatively higher connectivity burden on households if the bottom of the pyramid is sizeable. With hikes looming again, that burden will only grow.
Beyond Absolute Dollar Terms
Comparative affordability across nearly 200 economies is best assessed using the International Telecommunication Union’s mobile data and voice high-consumption basket, which measures the monthly cost of this basket as a percentage of gross national income (GNI) per capita — capturing the income-adjusted burden of connectivity.
The comparison produces a telling insight — India is not among the leading major economies with respect to affordability of voice and data. China, Brazil, Germany, the UK, Japan, and the US record lower affordability burdens, as household incomes are significantly higher relative to the cost of connectivity.
The lesson therefore is: Low prices are an achievement of telecom policy; affordability reflects the interaction between telecom policy and the broader economy. India has largely solved the challenge of making broadband inexpensive, but making connectivity universally affordable increasingly depends on income growth, productivity, and citizens’ ability to participate meaningfully in the digital economy.
The paradox is simple: India has the world’s cheapest data in absolute dollar terms, yet not the world’s most affordable connectivity when measured against what its citizens earn. This is not a semantic distinction — it has direct consequences for how we think about the next phase of India’s digital inclusion agenda. If affordability is read only through the lens of low absolute prices, the policy urgency to close residual gaps — not only for mobile broadband but also particularly for the bottom of the pyramid, for fixed broadband in tier-II and -III towns, and for first-time internet users in rural India — risks being diluted.
The UN Broadband Commission’s own target, that entry-level broadband should cost less than 2% of monthly GNI per capita in developing economies, is one India meets only narrowly at the national median — a figure that conceals the higher burden borne by the common man. Importantly, affordability should no longer be viewed merely as a telecom pricing issue; it is increasingly an economic growth issue. OECD and World Bank studies have consistently linked greater broadband adoption to improvements in labour productivity, enterprise competitiveness, and GDP growth, particularly in emerging economies.
The logic is intuitive. Lower connectivity costs encourage greater broadband adoption. Wider adoption expands digital participation by households, businesses, schools, and public institutions. Greater participation accelerates digital commerce, financial inclusion, online education, e-governance, and enterprise digitisation, lifting productivity across the economy. Higher productivity contributes to stronger growth and higher household incomes, which in turn further improves the affordability of connectivity — a virtuous cycle worth actively engineering.
Seen through this lens, affordability becomes an investment in economic capacity, not simply a consumer subsidy. We need to maximise the economic value generated by every additional connected citizen — not merely to push tariffs lower.
None of this is an argument against celebrating India’s genuine telecom achievement. The fall in data prices since 2016 has been a great reform of the past decade. But as India aims to make telecom and digital services a still-larger share of GDP — from an estimated 12-14% today to an ambitious 20% by the mid-2030s — affordability must be measured against what an average Indian actually earns, for the specific services they actually need.
Providing the world’s cheapest data is something India should be proud of. With 35% unconnected to the net, the goal of the world’s most affordable data is still ahead of us.
Disclaimer: The views expressed are the author’s own and do not reflect the official policy or position of Financial Express.