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Policy & Regulation
High spectrum price will lead to an increase in tariff, says COAI
Manoj Gairola |  New Delhi |  27 Oct 2014

Whenever there is auction of spectrum, news stories start appearing how high spectrum prices will increase tariff for consumers. So no one was surprised when Cellular Operators Association of India (COAI) director general Rajan Mathews cautioned that high spectrum prices may increase tariffs. He has an old argument. He says high spectrum prices will increase debt of telcos and this will result in an increase in as telcos will pass it on to the consumers.

But Mathews is helpless as his own members are responsible in bidding high prices for spectrum. Even in last round of bidding, the find prices of spectrum were much more than the reserve price in most of the circles.

“Where would money would come from? Banks are also unwilling to lend to telecom operators due to high debt burden. Also the telcos have to spend on network infrastructure. So, after paying such huge amount for spectrum only, they have to pass the burden to customers,” Mathews told a news agency.

TRAI had suggested a 10 per cent higher base price for the next round of spectrum auction in the 1800 Mhz band. The Telecom Regulatory Authority of India (TRAI) had recommended a price of Rs 2,138 crore per Mhz for the 1800 Mhz band and Rs 3,004 crore per Mhz for the premium 900 Mhz band.

The spectrum auction will be conducted for radiowaves in 900 Mhz held by existing telecom operators Airtel, Vodafone, Idea Cellular and Reliance Communications through their licences that are expiring in 2015-16.

In the 900 Mhz band, about 184 Mhz of spectrum is likely to be auctioned. In 1800 Mhz, government has proposed to auction 104 Mhz of spectrum which included spectrum held by licences that are expiring in 2015-16 and unsold airwaves in February auction.

    
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27 Oct 2014(IST)  
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