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Raised Price Of Spectrum Likely To Shoot Up Cost Of Mobile Calls
There could be a huge demand for telecom spectrum among telecom operators resulting in a hike in charges for mobile calls. Though the impact is not likely to be felt immediately, yet a price rise is expected in the long term.
Mobile phone tariffs have been on chasing a downward trend for the past 18 years. The trend can no longer be maintained. Tariffs would have to be raised to make up for the raised price of spectrums.
Eight companies won a bid for Rs 61,162 crore for spectrum between 900MHz and 1800MHz in the auction ending on February 13. The sum would be raised through loans from investment companies like banks. To repay the loans, tariffs for mobile calls would have to go up, or the services offered by mobile companies would have to be slashed. Discounts and freebies would have to be done away with.
The hike in tariffs would be inevitable in view of the increasing cost of spectrum. Telecom companies can no longer afford to bear the cost. They would have to share some of it with consumers in the form of hiked tariffs. They are not in a position to borrow from financial institutions owing to the accumulation of a great debt burden.
The hiked tariffs would impact quite a few plans of the government