Telcos want to study Trai's marginal hike theory

A few days after chiefs of leading telecom companies promised Kapil Sibal solid proof on possible doubling of tariffs, telecom industry body COAI has now said it will first review and analyse Trai's claim of minimal hike in call rates.

"We are going to review and analyse Trai's calculation. We are trying to find out what is their assumption and what is their calculation methodology that shows 1 or 2 paisa increase (in tariff) per minute," Cellular Operators Association of India Director General Rajan Mathews told PTI.

Mathews was responding to a query on the status of telecom companies' calculation to justify the claimed tariff hike of up to 100%.

Leading telecom operators have said Trai's recommendation will result in tariff hike of 25 to 30% on pan-India level and up to 100% in some circles.

He added that after reviewing Trai's calculation, telecom service providers will send their calculation to Telecom Minister Kapil Sibal and DoT Secretary R Chandrashekhar.

"Without seeing Trai calculation, it will not be appropriate for us to send our calculation," Mathews said.

Bharti Airtel Chairman Sunil Mittal, Vodafone Chief Executive Vittorio Colao, Idea Cellular Chairman Kumar Mangalam Birla, Telenor CEO Jon Fredrik Baksaas and a top ranked representative from Videocon are likely to meet Sibal.

As per telecom ministry officials, the scheduled meeting is for telecom companies to present justification of their various claims including tariff hikes.

"They (Chiefs of companies) promised to submit proof of their claims like tariff hike and other issues within six hours of meeting the Minister (Sibal). We were expecting it by Thursday but not yet received it. Minister has now given them time on Monday," an official said on Friday.

Trai has suggested a base price of Rs 3,622 crore for one megahertz (MHz) for pan-India spectrum. This is around 10 times higher amount for pan-India operations than the price at which 2G licences bundled with 4.4 MHz spectrum were allocated in 2008 under the then Telecom Minister A Raja.

As part of spectrum auction recommendations, Trai has proposed roadmap for spectrum refarming under which existing player will be made to use high frequency of 1,800 Mhz band compared to the low frequency band of 900 Mhz.

Telecom signals emitted using 900 Mhz frequency band cover large area compared to 1,800 Mhz band. These proposals, if approved, will hit business of incumbent operators, including Bharti Airtel, Vodafone and Idea Cellular.

Vodafone has said refarming will put additional cost burden of Rs 10,000 crore on the company for network roll out and Idea Cellular has earlier said that it will have to write-off around Rs 17,000 crore.