According to the Cellular Operators Association of India (COAI), the telecom operators are planning to hike mobile tariffs to compensate for the increased spectrum cost to be incurred in the February 2015 auctions. The association believes that the operators might pass the burden of high expenditure to the customers in the form of higher mobile tariffs in the near future. In order to maintain profitability, the operators have already been cutting on their freebies and discount offers.
COAI is of the view that the operators will pay around Rs 400 billion for the spectrum in the upcoming auctions and given the reluctance of the banks to provide finance to the debt-ridden telecom sector, the telecom service providers will have to turn to the customers.
Earlier, the Telecom Regulatory Authority of India (TRAI) suggested a 10 per cent hike in the base price for the next round of spectrum auction in the 1800 MHz band. It recommended a price of Rs 21.38 billion per MHz for the 1800 MHz band and Rs 30.04 billion per MHz for the 900 MHz band.
