Thirty gigabytes of mobile data is an insane amount. Indian consumers can get it in relatively cheap plans. It's almost contradictory. If everyone is using more and more data every year, why does every additional gigabyte feel so cheap? Because telecom is an industry with very strange economics. The network infrastructure requires an insane amount of money to build, but once it's built, the marginal cost of every additional gigabyte is close to zero.
The First Gigabyte Costs Billions
Before any telecom company can sell you a single gigabyte, it has to build a network. Spectrum, cell towers, fibre, data centres, radio, power, software, employees, retail stores, and network maintenance all add up. The bill for all of that comes due long before the first customer has used a single gigabyte. Once the network is built, however, the company barely has to spend anything to let another customer watch another YouTube video.
That's why telecom companies have such a strong incentive to saturate the market with data plans. The more traffic they carry, the more they can spread out their fixed costs over additional gigabytes.
India's Obsession With Data
According to Reliance, as of March 2025, Jio customers were using an average of 33.6 GB per subscriber per month on a network carrying more than 17 exabytes of traffic each month across 488 million users (Reliance Industries Limited). This would have been considered an insane amount even during India's 3G era.
The reason why Indians can afford such data-intensive plans is because Reliance invested billions into building out its 4G and 5G networks, and fibre infrastructure. It has to in order to carry all of that traffic. But cheap data is a relative term. It's not cheap in comparison to the cost of the network infrastructure. It only seems cheap because the fixed costs get amortized over an extremely large amount of data.
Telecom Companies Don't Sell Water
A litre of water has a certain cost. Another litre has the same cost. You need another bottle, more water, and more transportation. It all adds up. Digital traffic is different. If you have the network infrastructure to carry one gigabyte, you can carry another one for roughly the same amount of money.
That's why telecom companies don't sell gigabytes the way water companies sell water. They sell plans. 1.5 GB per day. 2 GB per day. Unlimited 5G with a qualifying plan. Voice, SMS, and streaming subscriptions. The idea is to get you to pay a certain amount of money every month for access to the network.
The Number Everyone Cares About Is ARPU
One of the most important numbers in the telecom industry is ARPU, or average revenue per user. According to Bharti Airtel, India's ARPU for FY2024–25 came to ₹245, up ₹36 from the previous year after the telecom sector raised tariffs across the board. The company called the increases a "tariff repair" to improve industry finances and returns on capital (Airtel).
As you can see, the telecom companies care about revenue per user as much as you care about gigabytes per user. If you're on a 1.5 GB per day plan and switch to a 2 GB per day plan, your ARPU has gone up. You're getting more data for a higher price, which is good for the telecom company.
Unlimited Data Is A Magical Word
The word unlimited is very appealing. It takes the guesswork out of how much data you can use. It also helps telecom companies to segment their customers. If most of your customers are on a 1.5 GB per day plan, you can let some of them upgrade to an unlimited data plan and stop worrying about how much traffic they consume. You can think of it as a buffet. Everyone can take as much as they want, but most people will only take a little. The same principle applies to unlimited data plans.
5G Is About Capacity, Not Your Bill
Every generation of mobile networks has brought new advancements that allow the network to carry more data over the same spectrum with the same infrastructure. This means that the marginal cost of an additional gigabyte is lower with every network upgrade. You might not notice a significant change in your bill, but you can expect to see improvements in the amount of data you can consume, the speed of your downloads, and the resolution of your videos.
Why Can't Everything Be Cheap?
The reason why telecom companies can't just lower prices every year is because they need to recoup their investments and fund future network upgrades. Spectrum, cell towers, fibre, and equipment all need to be paid for. The money to pay for them has to come from somewhere. Indians will always be able to get an insane amount of data for relatively cheap prices, but it will never be completely free. There's an extremely large amount of fixed costs that need to be amortized over an extremely large amount of data.
Scale Is A Requirement
High fixed costs also explain why the telecom industry is dominated by a few large companies. Two telecom operators can't just split the cost of a nationwide network and compete with one another. Every company has to be big enough to justify the costs of building and maintaining a nationwide network.
If a company loses customers, it still has to pay for all of its network infrastructure. That's why price wars are so devastating to the telecom industry. They cause a rapid loss of customers and revenues with little impact on the companies' ability to fund future network upgrades.
India's Experience With Cheap Data
India has seen the effects of the telecom industry's unique economics firsthand. Consumers wanted cheap data, and the industry responded by building out fibre and 4G networks and lowering prices across the board. But there was a hidden cost to that approach. Operators had to raise prices periodically to maintain their ARPU. Consumers continued to get more data for the same price, but they weren't willing to pay more for it.
You Are Not Buying Data
You might think that you're buying data when you buy a mobile data plan, but you're actually buying access to an extremely expensive network. The telecom company wants you to use as much data as possible so that it can recoup its costs and fund future network upgrades. That's why mobile data plans can give you an incredible amount of data for relatively cheap prices. Every video you stream feels almost weightless, but the tower that carries it is anything but.