July 07, 2024
Profit Hungry Jio and Airtel Fleece Customers

P Abhimanyu

JIO and Airtel have steeply raised their tariffs. Jio has hiked its tariff from 12 per cent to 25 per cent and Airtel has hiked its tariff from 11 per cent to 21 per cent. The media has projected that the profits of Jio and Airtel would increase by Rs 20,000 crore as a result of these tariff hikes. On the other hand, these tariff hikes will badly hurt the people in the lower income group, especially the working masses, who are already reeling under the sky-rocketing prices of essential commodities.

The telecom companies have justified these tariff hikes as a measure to increase their Average Revenue Per User (ARPU). But this is totally a misleading statement. Absolutely there is no reason for the private companies to raise their tariffs so steeply. It is an undeniable fact that both Jio and Airtel are already making hefty profits. Jio has made a net profit of Rs 20,607 crore in the financial year 2023-24. Airtel has made a net profit of Rs 7,467 crore during the same period. Hence such a steep tariff increase, which will fleece the common people, is totally unwarranted.

There is a regulator in the telecom sector, called TRAI (Telecom Regulatory Authority of India), whose duty should also be to ensure that the customers are not exploited by the profit- hungry private telecom companies. However, in practice, the TRAI only serves the interests of the private telecom companies. When Jio started its service in the year 2016, it flouted all the rules of the TRAI. But the TRAI remained as a silent spectator. A senior bureaucrat, J S Deepak, who was the secretary of the department of telecom at that time, raised serious objections to the violation of rules by Jio and wrote to the TRAI, demanding action. TRAI did not take any action. Instead, J S Deepak was shunted out of the DoT overnight by the Modi government.

Under the above-mentioned circumstances, it is only the BSNL that had been acting as the true ‘regulator’ of the telecom sector. Due to stiff competition from the BSNL, the private telecom companies were restrained from raising their tariffs capriciously. However, the scenario has totally changed now. BSNL has not been able to launch its 4G and 5G services till date, as a result of which it is greatly handicapped from competing with the private operators on an equal footing.

Due to the non-availability of 4G and 5G services with BSNL, its customers are deprived of highspeed data service. This has compelled them to desert BSNL massively and migrate to Reliance Jio and Airtel. As per the data released by the TRAI, in 2023–24 alone, BSNL has lost a whopping 1.8 crore customers. In March 2024 alone, 23.54 lakh customers have deserted BSNL. Whereas, in the same month, Reliance Jio has gained 21.43 lakh new customers and Airtel has gained 17.5 lakh new customers. All these developments have encouraged Jio and Airtel to raise their tariffs steeply.

Why BSNL has not been able to launch its 4G and 5G services till today? It is because of the following two road-blocks created by the Modi government.

a) In 2019, BSNL was not permitted to upgrade its existing 3G network into 4G network.

b) Again in 2020, BSNL is barred from procuring standard 4G equipments from global vendors, at par with Reliance Jio and Airtel. Instead, BSNL is compelled to procure its 4G equipments only from Indian equipment manufacturers. 

In May 2023, Ashwini Vaishnav, former minister of communications boasted that the BSNL would launch its 4G service within a few weeks and the same would be upgraded to 5G service by November/ December of that year itself. However, still BSNL has not been able to launch even its 4G service. 

Keeping all the factors into consideration, BSNL Employees Union (BSNLEU) demanded that the BSNL should be temporarily permitted to use Vodafone Idea’s network for providing 4G service to its customers. Being the biggest shareholder of Vodafone Idea, the government could have very well implemented this proposal. But it was not done. BSNLEU organised country-wide demonstrations, demanding implementation of this demand.

In the wake of steep tariff hike by Jio and Airtel, BSNL Employees Union has once again written a letter to the minister of communications, demanding that steps should be taken for the immediate launching of BSNL’s 4G service and its speedy upgradation to 5G service. By starting 4G and 5G services, BSNL will be in a position to provide high speed data service to the common people, at affordable tariff rates.