Mobile tariffs may go up soon

HYDERABAD/NEW DELHI: Mobile subscribers may have to cough up more on monthly bills soon with the industry hinting at a rate hike following the Supreme Court directive to government to cancel 1

Published: 03rd February 2012 03:16 AM  |   Last Updated: 16th May 2012 05:48 PM   |  A+A-

HYDERABAD/NEW DELHI: Mobile subscribers may have to cough up more on monthly bills soon with the industry hinting at a rate hike following the Supreme Court directive to government to cancel 122 licences.

The eight telecom operators whose licences will be cancelled have a subscriber base of nearly 60 million. bAs of Dec. 2011, India has 893.84 million mobile subscribers, and is the world’s second largest market. “The eight operators only have over 5 per cent of the market share.

In the immediate future, we do not foresee an increase in tariffs but operators may want to consider that possbility depending on the spectrum auction,” Rajan S Mathew, director-general, Cellular Operators Association of India told Express. Benoy C S, director, ICT Practice, Frost & Sullivan, South Asia & Middle East, said, “This could lead to higher telecom tariffs due to less competition.

The verdict is good news for the established incumbent operators and we are likely to see an increase in tariffs shortly.” The Telecom Regulatory Authority of India (Trai) said it is alert to the possibility of a tariff hike and that it will keep a watch on the situation. Now that the licences will have to be cancelled, over 500 Mhz of spectrum will be available for auction in three months and telecom players will have to pay the price determined by auction.

So far, Indians have enjoyed one of the lowest telecom tariffs with operators charging as low as one paise per second. However, with revenues under pressure, service providers recently revised tariffs -- both prepaid and post.

These included private players such as Airtel, Vodafone Essar, Tata Do- CoMo and Reliance Communications.

For instance, in September, 2011 Airtel revised rates for its ‘Advantage’ and ‘Freedom’ pre-paid tariff plans from 50 paise per minute to 60 paise per minute for local and STD mobile-tomobile calls. TRAI said existing customers may not have see much of an impact as about 95 per cent of the market share is held by operators who were granted licences before Jan. 2008. “Subscribers have the option to port out through mobile number portability (MNP). We will instruct the operators to inform their subscribers and come out with advertisements,” said J S Sarma, chairman of TRAI.

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