Rs 14 K cr base price will lead to 37-49 p call rate hike: COAI
New Delhi: Telecom industry body COAI Monday claimed that the Rs 14,000 crore base price fixed by Cabinet for auction of telecom spectrum will lead to 37-49 paise per minute increase in call tariffs.
"...The Cabinet's decision of fixing the reserve price for re-auction of 2G spectrum at Rs 14,000 crore for 5MHz will impact tariffs to the tune of 37-49 paise per minute," Cellular Operators Association of India (COAI) said in a statement.
The Cabinet, chaired by Prime Minister Manmohan Singh, has finalised Rs 14,000 crore for 5 Mhz spectrum in 1800 Mhz band and Rs 18,200 crore for 5 Mhz spectrum in 800 Mhz band as minimum price.
The base price approved by Cabinet was 22 percent lower than Rs 18,000 crore minimum rate suggested by the Telecom Regulatory Authority of India (Trai). It is, however, 7 times higher than the price new companies had paid in 2008 to get spectrum from the then Telecom Minister A Raja.
Terming the base price of 1800 Mhz band spectrum too high, COAI said that reserve price per MHz per population in India (on purchasing power parity basis) of Rs 19.68 is enormously high as compared to Rs 1.06 that Ofcom (the telecom regulator of the United Kingdom).
"For the 800 MHZ band, Ofcom has announced a reserve price that works out to Rs 3.18 per MHz per population while that of India stands at Rs 25.58 per MHz per population. Hence, it occurs that the Indian operator will have to shell out 1,700 percent more than the UK operator..." COAI said.
COAI added that the total industry debt will rise to anywhere between Rs 3.7 lakh crore to Rs 5.4 lakh crore as per the two separate scenarios provided by TRAI in it analysis on impact of spectrum price.