Mobile Tariffs Likely to Go Up, Says COAI

Published: 14th March 2015 06:05 AM  |   Last Updated: 14th March 2015 06:05 AM   |  A+A-

NEW DELHI:Mobile tariffs are likely to go up as telecos’ debt burden rises further to acquire spectrum.

So far, the spectrum auction proceeds crossed Rs 1 lakh crore and is expected to rise further.

According to Rajan S Mathew, Director General, COAI, the rise in tariffs should happen in the next few quarters as and when the companies’ investments start rolling out.

With over 970 million subscribers, India offers one of the lowest mobile tariffs globally. However, the average revenue per user stands at Rs 180 per month and is likely to decrease by another Rs 5-10 in the coming months, said Rajan.

Mobile Tariffs.jpgThe strong collective market share and pricing power of three large operators - Bharti Airtel, Vodafone and Idea Cellular - should allow them to raise tariffs and deleverage, said S&P in a recent note.

Another compelling reason forcing companies to increase tariffs is the over-dependence on voice calls.

 Currently, 80 per cent of the total telecom revenue is from voice, while data contributes a mere 20 per cent. Telecom companies like Bharti Airtel, Vodafone, Idea Cellular are betting big on 3G and 4G roll out in order to increase revenue from data services.

“The data usage volume is increasing 15 per cent now. As the data usage increases companies are hopeful of making up the loss,” he told Express on Thursday.

Players Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications have locked horns with Reliance Jio and others to protect their existing spectrum holding in the ongoing auction that is crucial for providing mobile services.

While incumbents have participated in auction to defend their existing spectrum, RJio, Telewings (Uninor), Tata Teleservices and Aircel are in fray for additional spectrum.

The proceeds from the spectrum auction has already crossed Rs 1 lakh crore mark as aggressive bidding took place across all bands on the eighth day of the biggest sale of 2G and 3G airwaves.


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