Will customers end up paying for the spectrum auction in terms of higher tariffs?

We may soon see a price increase in our regular cellular tariffs, warned the telecom operators across India. The spectrum auction and the price reserved for the same will be a huge amount and covering the current debts with the new debts will be a head scratcher for the operators!

Spectrum Auction India

“This increasing debt load will place increasing margin pressures on operators due to higher interest expenses,” said Rajan S Mathews, director general at the Cellular Operators Association of India (COAI). “These additional costs will have to be passed on to consumers through higher tariffs” said Matthews. Else the government should reduce the spectrum prices, he added reports E.T

In February government is expected to auction limited quantity of spectrum in the bands of 900 MHz and 1800 MHz. “Holding auctions as is will set the industry back by three to four years,” Rahul Khullar, chairman of Telecom Regulatory Authority of India (TRAI), has said.

Leading operators like Vodafone, Bharti Airtel and Idea Cellular may spend a hefty price to save their licences in their specific circles, keeping in mind the licenses will expire in 2015 and 2016.

Good part is that the Government is expected to reveal the roadmap of the spectrum in the 700 MHz band before conducting the upcoming auctions for the 900/1800 MHz band. TRAI also made it clear that the auctions should commence only once there’s enough visibility on the availability of the 2100 MHz spectrum which are generally employed for 3G services. The reserve prices will be 10% premium than the last bid that won the auctions.

The 2015 Spectrum Auctions might turn out to be the biggest auction as it is expected to generate a whopping Rs. 2 Trillion for the state exchequer. In the hindsight, the revenue earned by the government in November 2012 and March 2013 auctions was less than what they expected.

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22 Comments on "Will customers end up paying for the spectrum auction in terms of higher tariffs?"

 

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Colorado
October 27, 2014 4:44 pm 4:44 PM
There we go again! Very soon mobile tariffs will change more rapidly than fuel prices. That said, don’t AVoId have 0.1% of ethics in them? I mean Tata & Aircel are running in loss that everyone knows but these three are literally sucking blood from the common man. They can easily afford to pay for the auction without passing the burden to us. It’s become a habit now to raise tariffs at their whims & fancies. Few years down the line if someone from the Board of Directors loses money in a gamble then they’ll raise tariffs the next day.… Read more »
SS
October 27, 2014 1:07 pm 1:07 PM
For People here who want to know the operators and circles where the licenses are going to expire are following- ANDHRA PRADESH AND TELANGANA CIRCLE- 1. Bharti Airtel 2. Idea Cellular ASSAM CIRLCE- 1. Reliance Communication BIHAR- 2. Reliance Communication GUJARAT- 1. Idea Cellular 2. Vodafone India HARYANA- 1. Idea Cellular 2. Vodafone india HIMACHAL PRADESH 1. Bharti Airtel 2. Reliance Communications KARNATAKA- 1. Bharti Airtel (2016) 2, Idea Cellular (2016) (Formerly Spice) KERELA 1. Idea Cellular 2. Vodafone India MADHYA PRADESH AND CG- 1. Idea Cellular 2. Reliance Communication MAHARASHTA- 1. Idea Cellular 2. Vodafone India NORTH EAST- 1.… Read more »
Sudhakar
October 27, 2014 4:43 pm 4:43 PM

What about Airtel, Aircel and Idea in Tamilnadu?

Rama
October 27, 2014 3:39 pm 3:39 PM

Thanks a lot for the info this was exactly what I wanted the author to mention in his article.

Kaushik Roy
October 27, 2014 11:43 am 11:43 AM

Recharge with long validity STV so that tariff increase does not effect the current STV upto its present validity date

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