High Spectrum costs to result in increased tariffs

The industry expects operators to raise calling charges from the third quarter of this financial year or withdraw promotional and discount schemes. These would also lead to a 25-30 per cent improvement in voice-per-minute realisations over the next four quarters. 

“Of course, it will go up, and that’s clearly the direction of tariffs now. You can’t price the key ingredient, spectrum, at high prices and expect the operators to absorb the impact,” Cellular Operators Association of India Director-General Rajan Mathews said. 

The companies may increase tariffs by a couple of paise, and after gauging the market reaction, look at “further” hikes. The hike would differ from operator to operator, Mathews added. 

The GSM spectrum auction was dubbed a failure with just five operators bidding for the spectrum, while the CDMA auction had also failed with no takers. 

“The failure of the GSM auction would result in less competition per circle for operators, and for subscribers, with limited options. Further, there would be mergers or acquisitions and consolidation in the sector,” Kamlesh Bhatia, research director at Gartner, said.

Source: http://cablequest.org/news/telecom-news/item/950-high-spectrum-costs-to-result-in-increased-tariffs.htmlSource: http://cablequest.org/news/telecom-news/item/950-high-spectrum-costs-to-result-in-increased-tariffs.html