‘Mobile call, service rates can go up by 12-15%’

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Mobile call and service rates can go up by 12-15% to make up for the Rs 1,09,874.91 spectrum price telecom operators need to pay to government, industry body COAI said.

The Cellular Operators Association of India (COAI), which represents all telecom companies that won spectrum in recent auction, contested the analysis shared by Telecom Minister Ravi Shankar Prasad and seconded by

Telecom Secretary Rakesh Garg that there will an impact of only 1.3 paise per minute on call rates.

“While the industry would be happy to review this calculation by the DoT, the industry’s analysis of the financial implications of the auction indicates an increase of more than 12-15% on the present tariffs, to make up for the cash outflows of the operators,” COAI said in a statement.

It said that the analysis shared by DoT does not seem to have factored in inflation, which is inevitable over a long period of 20 years.

“It is confusing for the industry, that after taking all the factors such as inflation, high spectrum costs, high cost for equipment and substantial regulatory costs, combined with low returns, how a hike of 1.30 paise per minute in tariffs would address the industry’s financial woes,” COAI said.

In the auction, Idea has bought spectrum for Rs 30,306.98 crore, Airtel at Rs 29,130.20 crore, Vodafone at Rs 29,959.74 crore, Reliance Jio Infocomm at Rs 10,077.53 crore, Reliance Communication at Rs 4,299.13 crore, Tata Teleservices at Rs 7,851.33 crore and Aircel at Rs 2,250 crore.

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