The Cellular Operators Association of India (COAI), which represents GSM players, on Tuesday said the high reserve price for spectrum would lead to an average increase of 44-60 paise per minute in call charges.
In its earlier report, prepared by accounting firm PriceWaterhouseCoopers (PWC), the industry body had projected a maximum price increase of 90 paise, mainly in metros, as a result of the high base price for 2G spectrum auction. However, it had said the average price increase would be 28 paise per minute .
The changes are based on the latest analysis made by the Telecom Regulatory Authority of India (Trai) under its new chairman Rahul Khullar, which has said an additional increase of 5 paise in category A cities to 15 paise in metros would be enough to maintain telecom operators' profitability at earlier levels after paying for the high price of spectrum.
Trai has proposed a reserve price of Rs 3,622 crore for auction of 2G spectrum (1,800 Mhz), much higher than the Rs 1,657 crore operators paid at the time of the previous allocation. The regulator has also suggested double the base price of airwaves in the 800 Mhz and 900 Mhz bands to Rs 7,244 crore per unit for pan-India bandwidth.
Explaining the reason for the revision of the rate impact, Rajan Mattews, COAI director general, said: “We have included the non-voice revenues as well in arriving at the tariff hike. In the earlier, reports, revenues from non-voice services were not included in the calculations.”
Pointing out to serious problems in the new calculation made by Trai, the GSM lobby said : “Trai, while arriving at the tariff impact, had assumed the minutes of usage (MOU) would increase from 327 in FY12 to 410 by FY16. This is contrast to the last four years, where MOU per subscriber per month has declined from 455 minutes in FY08 to 327 minutes in FY12.”
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Moreover, Trai had assumed non-voice growth to reach to 50 per cent in next five years in metros and in next ten years for rest of India. This is contrary to the Indian experience of last few years where non-voice revenue is stagnant at 12-14 per cent.
Besides, the PwC report said spectrum-refarming cost projected by Trai is inconsistent with operational realities.