Call Charges to Go Up by 12-15% in order to incur spectrum price: COAI

By March 31st, 2015 AT 11:33 PM

docomo-vs-relianceGet ready to allocate more budget for your mobile phone bills! The Cellular Operators Association of India (COAI) expects to hike the call charges by 12-15 percent in order to incur Rs. 1,09,874.91 (Rs. 1.1 lakh crore) spectrum price telecom service providers need to pay the Government.

COAI feels this price hike to be inevitable owing to the scenario where the industry faces a hike not only in spectrum cost, but also in equipment and regulatory costs. However, the association is ready for a calculation review by the Department of Telecommunications (DoT).

On the contrary, Government feels that the spectrum cost to be paid by the telecom operators will burden the mass only with Rs. 1. 30 paise per minute. Ravi Shankar Prasad, Telecom Minister and Rakesh Garg, Telecom Secretary said that the telecom operators have part payment option and the annual payment would come around Rs. 5,300 crore.

The telecom service providers have to make 25-33 percent initial payment based on the kind of spectrum they purchased. The following amount can be settled in 10 yearly installments after two years of a moratorium. Compared to the international players, Indian telecom service providers pay 60-70 times higher spectrum cost.

Also read: Circle wise provisional results of spectrum auction 2015

In the recent auction, Idea Cellular acquired the spectrum for Rs 30,306.98 crore. Airtel and Vodafone bought spectrum for Rs. 29,130.20 crore and Rs. 29,959.74 crore respectively. When Reliance Jio Infocomm attained the spectrum for Rs. 10,077.53 crore, Reliance Communication purchased it at Rs 4,299.13 crore. Tata Teleservices and Aircel were least on the price chart with Rs 7,851.33 crore and Rs 2,250 crore.

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