Spectrum resale terms will lead to 90 paise tariff hike: PwC
23 May 2012
A study by PricewaterhouseCoopers suggests that mobile tariffs would shoot up by about 90 paise per minute if the Telecom Regulatory Authority of India's proposals on the resale of radio spectrum to be vacated by various telecom companies under a Supreme Court ruling in early February.
The hike in rates would be particularly felt in metropolitan cities, the study by the global accounting consultant said. Current mobile call charges in metros range between 50-60 paise per minute.
Besides upping bills for users, the auction proposals could also increase the debt burden of Indian telecom operators by Rs2,72,000 crore over the next five years, the report said.
The PwC study was not quite independent – it was commissioned by the Cellular Operators' Association of India, which represents companies operating on the dominant GSM platform.
In contrast to the study's conclusions, the government has been maintaining that tariffs would not go up by more than 5.2 paise a minute under the steep minimum bid price for spectrum.
In its 'Recommendations on auction of spectrum' released on 23 April, TRAI said the estimated cost per minute could go up by 4.4 paise. An internal note within the department of telecommunications (DoT), which The Economic Times says it has viewed, estimates that the auction proposals would translate into a 5.2 paise per minute hike in call rates for subscribers in 2012-13.
