TRAI's spectrum pricing recommendation may double tariffs - Auspi

After the Telecom Regulatory Authority of India (TRAI) put forth its recommendations on spectrum pricing, telecom operators warned that tariffs could double in some telecom circles, if the government accepted these suggestions. According to a report by The Economic Times, Auspi (Association of Unified Telecom Service Providers of India), which represents CDMA and dual-technology mobile operators, like Sistema Shyam, Reliance Communications and Tata Teleservices has revealed that the reserve price recommended by the regulator for auctioning the 800MHz airwave band could lead to doubling of call tariffs.

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The base price proposed by the Telecom Regulatory Authority of India is Rs.7,244 crore per unit of spectrum for CDMA technology operators, and presently provide mobile and data services in the 800MHz band. This price is twice that of the reserve price of Rs.3,622 crore per unit of spectrum at the pan-India level for GSM technology. This price is said to be about thirteen times the price that operators were paid in 2008 for getting 2G licenses. Apparently, there are 150 million CDMA users, and, needless to say, majority of the users are GSM subscribers. Reportedly, CDMA lobby group Auspi (Association of Unified Telecom Service Providers of India) disclosed to TRAI in a letter, "The impact of cost on tariff is double as revenue is earned only on outgoing minutes. Thus if cost is transferred to customer then the tariff would increase by 104%." 

In March this year, when on-time spectrum fee was making waves, Airtel chief had also disclosed the possibility of rise in mobile tariff. Last month, reports revealed that telcos seemed upset over the price and obviously, a rise in tariff is the only way out, it seemed. Eventually, the consumer will have to suffer under the burden of higher mobile tariff. Just when attempts are being made to take mobile services to rural areas, while increasing connectivity across the nation, this price hike may appear as an obstruction.

Published Date: May 11, 2012 05:05 pm | Updated Date: May 11, 2012 05:05 pm