According to the Associated Chambers of Commerce and Industry of India (ASSOCHAM), payment for the spectrum won by telecom operators in the recently concluded spectrum auctions is likely to increase their debt burden to Rs 3,500 billion. At present, the debt burden of telecom operators stands at Rs 2,500 billion.
The industry body is of the view that consumer tariffs are also bound to rise significantly due to spectrum auctions. However, due to the level of competition in the industry, the increase in tariffs would not be adequate to cover the higher costs faced by operators. Further, ASSOCHAM believes that the cash outgo may restrict roll out of networks.
In the recently concluded auctions, spectrum has been sold at a cumulative bid amount of Rs 1,098.74 billion, 33 per cent higher than the reserve price. About 11 per cent of spectrum however remained unsold in the 800 MHz, 1800 MHz and 2100 MHz spectrum bands.
