Call rates can rise 100%, warn telecom operators

Telephone tariffs will go up 100 per cent hitting customers hard if the government accepts the sector regulator's proposals on spectrum auction, service providers warned yesterday.

"Our belief is that the implication could be as high as 100 per cent of the existing rates to be compensated by the customers. This would vary circle to circle and doesn't take into account any spectrum re-farming, which would actually push prices even further," said Sanjay Kapoor, Airtel chief executive officer.

Dark days: Telecom companies say the TRAI recommendations will spell doom for the Indian Telecom industry

Briefing the media a day after their bosses met key ministers and top officials to argue their case against the regulator's proposals, operational heads of the companies termed the recommendations as flawed and retrograde.

"The TRAI (Telecom Regulatory Authority of India) recommendations are flawed and retrograde, regressive and uncertain, which will harm consumer interest, and will ring the death knell for the Indian telecom industry," Kapoor said.

On the proposed re-farming, Kapoor said, "If we were to surrender the 900 MHz spectrum and switch to 1800 MHz, you as customers will find dark holes and on streets and bylanes. The rural part of the country will seem disconnected tomorrow."

Heavy expenditure
He also said the move could cost the industry thousands of crore and affect the environment.

"We will need to put more towers for 1800 MHz, with more diesel, and this will impact the environment."

The operators sought a drastic reduction in the reserve price of spectrum, rejection of recommendation on re-farming, auction all spectrum available and do away with rollout obligations for auctioned spectrum from the government.

They also said that an artificial scarcity of spectrum was being created by auctioning only a limited amount, which would push up the auction prices.

Vodafone managing director Marten Pieters said the operators were struggling for spectrum and it was in the interest of the industry to bring all the spectrum into play. "Every day you don't use it, you lose out."

"We need more spectrum. The average spectrum here is 6.4 Mhz, while everywhere else, you have 22 MHz," he said.