DoT to meet telcos this month to sort out various issues

COAI has contested the analysis shared by the govt which said there will be an impact of only 1.3 paise per minute on call rates

The department of telecommunications (DoT) will hold a meeting of all telecom service providers this month to sort out issues related to spectrum auction and mobile call rates.

Telecom Secretary Rakesh Garg will meet telecom operators on a regular basis to iron out the differences between the two that might have cropped up during the spectrum auction held recently. The industry had criticised the government over high reserve price of the spectrum auctioned and even afterwards, there have been divergent views on the impact of mobile call rates after buying out spectrum.

According to people close to the development, Union Minister Ravi Shankar Prasad might also meet telecom players to give them a chance to explain their viewpoints.

The government has generated revenues of Rs 1.10 lakh-crore, out of which around Rs 28,000 crore has already been paid by the winning bidders.

Cellular Operators Association of India (COAI) has said mobile call rates will go up by 12-15 per cent, as the operators will have to pass on some cost of acquiring spectrum to the consumers.

COAI contested the analysis shared by Prasad and Garg who said there would be an impact of only 1.3 paise per minute on call rates.

COAI said the analysis shared by DoT does not seem to have factored in inflation, which is inevitable over a long period of 20 years. “It is confusing for the industry, that after taking all the factors such as inflation, high spectrum costs, high cost for equipment and substantial regulatory costs, combined with low returns, how a hike of 1.30 paise per minute in rates would address the industry’s financial woes,” COAI said.

While Prasad had said companies have option to pay in parts, the annual load on telecom operators would be around Rs 5,300 crore. Telecom operators are required to make upfront payment between 25—33 per cent depending on the kind of spectrum purchased by them and rest in 10 yearly installments after a two-year moratorium.