‘Impact will not be more than 1.3 paise per minute for users’

Telecom Minister Ravi Shankar Prasad has dismissed mobile service operators’ statements that call tariffs will increase because of the high bids for spectrum. He sees no case for a rise in tariffs, and says these “campaigns” should stop.

“Tariff impact after the auctions will not be more than 1.3 paise per minute for users,” Mr. Prasad said in an interview to The Hindu on Thursday. About the criticism over high spectrum prices, he said: “It is not correct to speculate that prices of mobile calls will increase. We have seen estimates and analyses.”

The Minister said the spectrum won would be with telecom companies for 20 years. Hence, the total bids of about Rs. 1.1 lakh crore, if spread over 20 years, would lead to a payout of only Rs. 5,300 crore a year for operators. The annual revenues, he said, of mobile companies in India collectively are roughly Rs. 2 lakh crore.

“I think a lot of it [criticism] is motivated. It is part of a pattern. When we started, there was criticism over not enough spectrum being put on auction ... and now, it is being said tariffs would go up … don’t forget, the spectrum has been allocated for 20 years,” Mr. Prasad said.