The Department of Telecom said mobile tariffs are unlikely to rise in the near future as a result of the recently concluded spectrum auction because competition will restrain operators from hiking rates.
“As a policy maker, I think the tariffs should hold. I am not the operator, nor I am the regulator, but I am saying that there are two elements here and these elements will actually act together to restrain any increase in tariffs,” Telecom Secretary MF Farooqui said at the Mobile World Congress here. He said on the one hand, competition will restrain operators from increasing tariffs and on the other, new technology would allow them to lower costs and offer a wider range of services.
“One element is competition. So competition will hold back any operator from kind of doing anything which is going to reduce his market share. So I think that is going to be one big restraining factor and the second thing is I think there is the technology, which exists in the market that allows many other services to gradually be loaded on,” he said. Eight telecom companies, including Bharti Airtel, Vodafone and Idea Cellular, the biggest three in the country, bid a combined Rs 61,162 crore in the spectrum auction held earlier this month. The government offered airwaves in the 1800 MHz and 900 MHz bands.
Telecom operators have been cutting back on freebies and discounted minutes to maintain profitability and have been saying that the mobile industry needs annual tariff increases to sustain themselves.