Post-spectrum auction, tariffs not to rise

With the spectrum auction having come to a close, the focus now shifts to the winning telecom companies who will have to arrange funds for upfront payments as well as utilise the acquired radio waves to their advantage. As far as the impact of high spectrum prices on tariffs are concerned, companies have already clarified that there would be no immediate hike in call charges. Though the companies are required to pay a certain percentage of the winning price within 10 days (25 per cent in case of 900 MHz band and 33 per cent in case of 1800 MHz band), industry sources say companies like Bharti Airtel and Reliance Jio Infocomm (RJIL) have enough cash to make payments, while other firms like Vodafone India and Idea Cellular may go for funding from banks or other borrowings. In the bidding , Vodafone India topped the list by bagging spectrum worth Rs.19,600 crore, followed Bharti Airtel at Rs.18,530 crore.

Industry experts believe that unlike in 3G and BWA auction, this time the companies would not have much problem while making upfront payments as they have made prudent choices while bidding.

Industry-watchers also do not see any immediate hike in tariffs due to intense competition among players.

“The overall outcome should have been increase in tariff. However, due to intense competition, all the increase in cost is unlikely to get passed on to the consumer. The already highly leveraged balance sheets of the companies would get more leveraged ,” said Deloitte Haskins & Sells’ Hemant Joshi.

Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Aug 8, 2020 3:09:07 PM |

Next Story