High Spectrum Prices Will Likely Pressure Telcos Into Raising Tariffs: GSMA

High spectrum prices in the just concluded auctions are likely to put financial pressure on the Indian telecom operators who will eventually pass on the impact in form of rise in tariffs to consumers, global industry body GSMA said today.

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The biggest telecom spectrum auction ended on Wednesday after 19 days of fierce bidding and fetched about Rs 1.09 lakh crores to the government.

“Unfortunately these high prices will put increased financial pressure on operators and ultimately have a negative impact on consumers, reducing the value derived from the spectrum and hindering future economic growth and social gain in India,” GSMA Chief Regulatory Officer Tom Phillips said in a statement.

The GSM Association (GSMA), is the global trade association for GSM.

This comes a day after after Telecom Minister Ravi Shankar Prasad said as per an analysis,”the yearly load on telecom operators is going to be about Rs. 5,300 crores…and Rs. 0.013 paise per minute (mobile phone) call.”

GSMA, however, appreciated the large number of bids made by telecom operators and added that “This outcome reflects the commitment of national mobile operators to invest in India.”

The global industry body urged Indian government to enable a business and regulatory environment built around trust and certainty, which will facilitate fresh investment by mobile operators to expand mobile broadband services throughout the country.

“Mobile connectivity is a critical enabler for building a digitally empowered society and knowledge economy and must inevitably be at the heart of Prime Minister Narendra Modi’s vision for a truly ‘Digital India’,” Phillips said.

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