New Delhi: Huge outgo in spectrum auction by telecom operators will increase rates for mobile calls and other services in the long term, although it may not have any immediate impact on tariffs, industry body COAI said on Friday.
“Not immediate, it’s going to take about nine months to a year before you begin to start seeing the impact in terms of the implementation, roll out, investment in new equipment, all of these things have to happen,” COAI director general Rajan S Mathews said when asked about the impact of spectrum auction on tariffs.
He, however, added in the longer term, tariffs have to increase as the input costs of operators have been rising. “In the longer term, from the industry perspective you can’t see how you continue to increase the input cost and not expect the output cost to increase. This just doesn’t make economic sense,” he said.
The proceeds from the spectrum auction has already crossed Rs 1 lakh crore mark as aggressive bidding took place across all bands on the eighth day of the biggest sale of 2G and 3G airwaves. The amount is expected to rise further as there is spectrum which is yet to be sold. Incumbents Bharti Airtel, Vodafone, Idea Cellular and Reliance Communications are locked in horns with Reliance Jio and others to protect their existing spectrum holding in the ongoing auction that is crucial for providing mobile services.
While incumbents have participated in auction to defend their existing spectrum, RJio, Telewings (Uninor), Tata Teleservices and Aircel are in fray for additional spectrum. According to a research report by Barclays, the spectrum payments by telecom operators will have a limited impact on their balance sheets in near term as the payments are on a deferred basis.
