We could see a tariff hike again, very soon

Sunil Bharti Mittal, the Head of the India’s largest telecom company, Airtel, has indicated that the call tariffs in the country could possibly rise because of the Governments Policy to charge for Extra Spectrum in an interview to a news channel on at World Economic Forum.

The DoT is working day & night on the New Telecom Policy, 2011. One of the provisions under the new policy is regarding Spectrum Pricing. The Telecom Commission, Apex decision making body of Department of Telecom, has recommended charging for spectrum beyond 4.4 MHz for GSM Operators & 2.5 MHz for CDMA operators. Almost all the Operators have excess spectrum from this prescribed limit. And if these recommendations are given a green signal, it would create a burden of around Rs. 17,000 crores on the Indian Telecom Industry, which off late is not doing really good since a year or two.

As per the existing policy, excess spectrum (beyond 4.4 MHz for GSM and 2.5 MHz for CDMA) used to be allocated under the subscriber linked formula formulated by the BJP-led NDA Government.

The top honchos of the Indian Telecom Co.’s had also met Mr. Kapil Sibal a day before yesterday to ask him to rethink on pricing 2G spectrum with retrospective effect. If the recommendations are approved, they would increase burden on telecom operators, thereby increasing the overall tariffs.