India has 367.4 million Internet users — 175.18 million narrowband users and 192.30 million broadband users in the country as per TRAI data for September 2016.
TRAI says India has 119.79 million Internet and broadband users in rural markets against 247.69 million in urban locations.
Internet and broadband tele-density is 13.64 in rural areas against 61.98 in urban locations, according to TRAI’s September 2016 report.
TRAI, in order to improve data consumption in rural areas, wants Indian telecom operators to offer free data. TRAI says USOF can support the free allocation of Internet to users who have Internet-enabled devices.
Cisco says the average data consumption per subscriber was about 150 MB per month, while the average traffic generated from smart phones was slightly 17 higher at 430 MB. TRAI feels average data consumption would be much less for rural subscribers.
A monthly data pack of about 100 MB per user would be reasonable to address the basic digital needs of those users, including carrying out of digital financial transactions. After the expiry of 100 MB of data in a month on a mobile connection, the free data services will be suspended till the beginning of the following month.
The number of phone users in rural India is 445.94 million against 603.80 million in urban locations across the country.
TRAI says the average charge per MB of wireless data is about Re 0.20 per MB. Service providers in their latest offerings are charging Rs 1,499 for a 15 GB pack i.e. Re 0.10 per MB. The scheme will cost an amount of Rs 10 per subscriber per month.
As per a GSMA report, the number of smart phone users will grow to increase to 688 million in 2020 from 238 million in 2015. If rural subscribers account for 20 percent of the smart phones users, the number of rural smart phone users is likely to be nearly 50-60 million.
This scheme will provide free data benefits to smart phone subscribers in rural areas. This would translate into to a cost of approximately Rs 600 crore to provide 100 MB of free data to 50 million users for a period of one year.
“To bridge the affordability gap for the persons residing in rural areas and to support Governments efforts towards cashless economy by incentivising digital means, the Authority recommends that a scheme under which a reasonable amount of data, say 100 MB per month, may be made available to rural subscribers for free,” TRAI said.
The cost of implementation of the scheme may be met from USOF.
To increase participation of other entities for incentivizing free data, there is a need to introduce third party (Aggregator) to facilitate schemes which are TSPs agnostic and non discriminatory in their implementation.
Scheme for free data must be TSP-agnostic, must not involve any arrangement between the TSP and the aggregator/content provider and should not be designed to circumvent the “The Prohibition of Discriminatory Tariffs for Data Services Regulations,” notified on 8 February, 2016.
The following mechanism is recommended
# The Aggregators will need to register with DoT
# The registrant must be a company registered under Indian Companies Act, 1956.
# The validity of registration shall be 5 years.
# The registrant shall not either directly or indirectly, assign or transfer the Registration in any manner whatsoever to a third party either in whole or in part.
India in global broadband market
As per the State of the Broadband report, 2016 India has been ranked 132nd in the world for fixed broadband penetration, out of 187 countries ranked, and 156th in the wireless broadband penetration, out of 179 countries ranked.
Further, a white paper on broadband regulations and policy in Asia-Pacific region, released by ITU in November 2016, lists India below Vietnam and Sri Lanka in terms of fixed broadband penetration. India’s performance of 7 percent penetration of broadband is well below the world average of 46 percent.