Telecom Minister Ravi Shankar Prasad has dismissed mobile service operators’ statements that call tariffs will increase because of the high bids for spectrum. He sees no case for a rise in tariffs, and says these “campaigns” should stop.
“Tariff impact after the auctions will not be more than 1.3 paise per minute for users,” Mr. Prasad said in an interview to The Hindu on Thursday. About the criticism over high spectrum prices, he said: “It is not correct to speculate that prices of mobile calls will increase. We have seen estimates and analyses.”
The Minister said the spectrum won would be with telecom companies for 20 years. Hence, the total bids of about Rs. 1.1 lakh crore, if spread over 20 years, would lead to a payout of only Rs. 5,300 crore a year for operators. The annual revenues, he said, of mobile companies in India collectively are roughly Rs. 2 lakh crore.
“I think a lot of it [criticism] is motivated. It is part of a pattern. When we started, there was criticism over not enough spectrum being put on auction ... and now, it is being said tariffs would go up … don’t forget, the spectrum has been allocated for 20 years,” Mr. Prasad said.
Auction fetches Rs.1.10 lakh crore
up for auction
of fierce bidding
rounds of bidding
| The auction included airwaves held under nine licences of Idea Cellular, seven each of Reliance Telecom and Vodafone and six of Bharti Airtel that are set to expire | Telecos are required to pay upfront 33 per cent of the bid amount for the 2100 MHz, 1800 MHz and 800 MHz bands within 10 calender days of the close of auction. | The winning bidders will pay the rest of the amount over a period of 12 years - two years moratorium and then 10 yearly installments. | |
| Rs.1,09,874 cr: Total value of bids that the government got in spectrum auction | The spectrum auction conducted in 2010 brought about Rs.1.06 lakh crore, which included Rs.30,000 crore payment from BSNL and MTNL |
