Competition cut, mobile tariffs set to go up

[1]

Mobile tariff is likely to shoot up as the SC order takes out new players who had brought call rates down to as low as 1 paisa per second.

Balance sheets of old telecom companies, including Airtel and Vodafone, are under pressure due to the huge amount they paid for 3G spectrum and they now are likely to increase tariffs.

Another reason the tariff may go up is the telecom department is looking to charge old service providers a one-time fee for holding excess spectrum. Also, their licences are coming for renewal.

“Tariff was bound to go up even before the judgment. If new operators have to win licences through an auction and get back spectrum, there will be cost. Some of the cost will have to be passed to the consumer,” said Romal Shetty, national head (telecom) KPMG India.

Analyst Mahesh Uppal said the tariff will not become prohibitively high.