New Delhi: Telephone
tariffs will go up 100 percent hitting customers hard if the
government accepts the sector regulator's proposals on spectrum
auction, service providers warned Thursday.
"Our belief is that the implication could be as high as 100
percent 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.
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.
Present also at the news conference called by the Cellular
Operators Association of India (COAI) were Himanshu Kapania,
managing director of Idea Cellular, Rajiv Bawa, chief
representative officer, Telenor India, Arvind Bali, Videocon
director and CEO, and Vodafone managing director Marten Pieters.
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 inside and in streets and bylanes. The rural part
of the country will seem disconnected tomorrow."
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 of spectrum is being
auctioned which will push up the auction prices.
Pieters of Vodafone 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
"We need more spectrum. The average spectrum here is 6.4 Mhz,
while everywhere else, you have 22 MHz."
On the proposed high spectrum reserve price, Kapoor said: "Any
business case for a new technology has to be seen in a longer
period of time but there are business cases which don't make sense
in a 20-year horizon. And this is one of them."
Asked about differences among the firms, Bawa of Telenor said: "We
compete in the market and fight all the time, and we will continue
to have differences, but today we are here because we have a
common cause, and there are things that are not good for a new
player, and not good for an incumbent."
"The premise is the supreme court order, which say that licenses
are quashed, and fresh licenses need to be given through an
auction. At the most, one new player will be able to come in at
these prices. This will impact tariffs, the roll-out obligations
will impact, on top of this," he added.
Telenor's had urged the government to invite only new players for
Kapoor also said that the recommendations if accepted would badly
affect the government's plan of extending low cost telephony in
rural and remote areas of the country.
TRAI has recommended, among other proposals, a reserve price of
Rs.3,622 crore for 1 MHz pan-India spectrum, which is around 10
times higher than the price at which 2G licences were allocated in
2008 under former Telecom Minister A. Raja.