Indian Telecom Contradictions: Growth, Debt and Digital Addiction
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SEPTEMBER 2024
On September 10, 2024, “The Financial Times” published a report from Australia that highlighted an ongoing debate about the harmful effects of social media on youth.
The Australian government is considering implementing a minimum age limit for social media usage, potentially between 13 and 16 years, due to growing concerns over screen addiction and its negative impact.
Despite some opposition, the Prime Minister emphasized the public’s concern and suggested it could become an election issue.
Despite this, a ban on social media for those under 16 seems likely, and South Australia has already taken legislative steps to limit access, albeit on a smaller scale.
This issue raises important questions about the situation in India, where social media and OTT platforms have rapidly transformed the country’s telecom sector.
While concerns about social media addiction are valid, the broader question is whether something more profound is driving the rise of these platforms in India.
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OTT platforms have profoundly shifted data consumption habits in India...
This change is not just technological but also socio-economic, fundamentally altering how Indians consume data and interact with one another.
The Data Consumption Revolution
OTT platforms have profoundly shifted data consumption habits in India, reshaping its socio-economic fabric.
India now boasts around 1.17 billion telecom subscribers, with roughly 500 million active OTT users and 600 million social media users.
This rapid adoption has revolutionized how Indians communicate, work, and consume content.
This digital transformation has occurred over the last five to seven years, surprising many with its speed and scale.
While it has undoubtedly been transformative, it has also introduced uncertainty about how future generations will manage life in an increasingly digital India.
Much like wildfires, social media and OTT platforms have spread rapidly, fueling distraction and isolation among young people. It is a serious issue that demands civil society and government attention.
Reliance Jio’s Disruptive Entry
In 2016, Reliance Jio disrupted the Indian market by offering inexpensive data and free voice calls, enabling millions of Indians to access the internet for the first time.
It paved the way for OTT platforms like Netflix, Amazon Prime, and Disney Hotstar to enter the Indian market. Regional players like Zee5 and MX Player also quickly rose to prominence.
Between 2016 and 2023, data consumption grew exponentially, reaching 15-18 GB per month per user, one of the highest rates in the world.
Most of this data is consumed via mobile devices, particularly for video streaming, with IPL cricket matches on Disney Hotstar being a key driver.
Social media platforms like YouTube, Instagram, Facebook, and WhatsApp have also contributed to this surge in data usage, with short-form videos and live streaming gaining popularity.
This shift marks a move from voice to data in the telecom sector. Reliance Jio now earns about ₹175 per user per month, with Bharti Airtel generating around ₹200 per user.
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Between 2016 and 2023, data consumption grew exponentially, reaching 15-18 GB per month per user...
Though modest by global standards, this shift is significant for India’s telecom industry.
The Issue of Bundling
Telecom companies have begun bundling data with OTT and social media access to maximize revenues.
This approach pushes an overwhelming amount of content onto users, transforming telecom companies from mere data providers into key drivers of content consumption.
The content revolution is not confined to urban centres; about 50% of OTT content is now in regional languages, reflecting and resonating with local cultures.
The democratization of information has allowed content to flow from city centres to rural areas, small towns, and villages.
However, this regional and local focus will also lead to a fractured national identity, if it remains unchecked.
The growing divide calls for a unified telecom policy that integrates regional differences while promoting national unity.
Social media has drastically altered social interactions, particularly among Indian youth.
Platforms like Instagram, Facebook, and YouTube have become primary spaces for self-expression and activism; with around 600 million social media users, primarily aged 18 to 34, young Indians are passive consumers and active content creators, shaping India’s new social dynamics.
The Growing Challenges
The rise of social media has brought with it serious concerns about mental health, privacy, and digital addiction.
Prolonged use of social media is associated with anxiety, depression, and an increase in cyberbullying.
Platforms like WhatsApp, with 550 million Indian users, and Facebook, with 340 million, have become significant vectors for misinformation and data exploitation.
While the Indian government has implemented some regulatory measures, these are inadequate.
At the same time, telecom companies are integrating social media with e-commerce and financial services, creating new business models.
Platforms like JioMart, Jio Payment Banks, and Airtel Payments Banks now serve over 100 million customers, and the demand for digital transactions continues to grow.
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Social media has drastically altered social interactions, particularly among Indian youth
This convergence of telecom, social media, and e-commerce is accelerating India’s digital economy and creating new business opportunities, but it is also generating market uncertainties for which India is not fully prepared.
Telecom companies have invested heavily in infrastructure, spending around ₹1.5 lakh crore on spectrum acquisition alone. India already has over 650,000 telecom towers spread across urban and rural landscapes.
However, companies like Vodafone are burdened with massive debts—Vodafone alone has debts totalling ₹2.3 lakh crore.
Even though companies like Jio remain profitable, revenue streams are not keeping pace with infrastructure investments.
A Fractured Future?
India’s young population, 65% under age 35, is at the heart of this digital transformation.
Having grown up in a world dominated by OTT platforms, social media, and high-speed internet, their future lies in fields like artificial intelligence, digital marketing, and content creation.
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...Vodafone alone has debts totalling ₹2.3 lakh crore
However, India lacks adequate digital literacy, particularly in cybersecurity, data analytics, and financial technologies.
Without addressing this gap, India’s youth risk becoming trapped in a cycle of digital dependency.
Telecom companies, burdened by debt, are driving this digital revolution, but the future remains uncertain.
Without proper policy direction and oversight, the industry fueling India’s digital transformation could become its greatest threat.
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...India’s youth risk becoming trapped in a cycle of digital dependency
In conclusion, India’s telecom sector—once a beacon of opportunity for digital empowerment—now faces significant challenges.
The youth of India, at the centre of this transformation, must develop the skills to navigate this digital landscape.
Otherwise, the sector that has powered India’s digital growth could inadvertently threaten its future prosperity.
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