Operators Says Call Rates May Up By 30 Percent, Govt Says Difficult to Predict

By April 28th, 2012 AT 1:11 PM

India’s leading GSM mobile service providers – Bharti Airtel, Vodafone, Idea Cellular, Uninor and Videocon who are unhappy with the TRAI’s recommendations on spectrum, warned that high spectrum costs would lead to a 25-30% hike in call rates.

While Government said it is difficult to predict likely changes in call rates of mobile telephones in the wake of cancellation of 122 licenses as per Supreme Court verdict. This is because, as per the current Tariff framework, call rates of mobile services are under forbearance except for National Roaming where ceiling tariff has been specified. Mobile operators have the flexibility to offer different tariffs depending on the market conditions and the other commercial considerations.

In their joint letters to the Telecom Minister, Kapil Sibal, Sanjay Kapoor – Bharti Airtel CEO for India and South Asia, Marten Pieters – Vodafone India MD and CEO, Himanshu Kapania – Managing director Idea Cellular , Sigve Brekke – chief executive Uninor and Arvind Ball- director and CEO Videcon Telecommunications, demanded that all airwaves in the 1800 MHz band be put up for auctions, and the reserve price be slashed by 80% to allow the market to discover the ‘true’ price.

The five mobile service providers also warned that the high cost for spectrum would rob operators of resources required for network rollouts, a move that would push back the industry by several years. They have also asked the minister to do away with Trai’s rollout obligations. Under such inconsistent, regressive and uncertain regulatory environment, it is inconceivable that the telecom industry, which is already in a state of doldrums, will be able to deliver on the Government’s vision of affordable communications, rural penetration and roll-out of data services.

Operators also demanded that Telecom Minister Kapil Sibal should reject all key proposals suggested by the Telecom Regulatory Authority of India (Trai).

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