Indian mobile operators may have to raise tariffs by as much as 15% to compensate for the increased cost burden of the recent $17.6 billion spectrum auction.
The Cellular Operators' Association of India (COAI), the industry body representing the nation's GSM operators, has challenged the telecom minister's claim that tariffs would not increase beyond a mere 1.3 paise ($0.0002) per minute, the Economic Timesreported.
The COAI instead asserted that operators will need to raise tariffs by as much as 12-15% as a result of the drastic impact the auction will have on the industry's cost structure.
COAI complained that Indian mobile operators pay around 60-70 times more for spectrum than operators in other countries.
Mobile operators bid a record 1.1 trillion rupees ($17.65 billion) during the just-concluded auction for spectrum in the 800-MHz, 900-MHz, 1800-MHz and 2100-MHz bands. Bharti Airtel, Vodafone and Idea Cellular are believed to have been the biggest spenders.
Operators were required to pay part of their bid price up front, and the government has so far received nearly 110 billion rupees in payments.