Minister claims spectrum costs will not lead to higher tariffs

30 Mar 2015

India’s telecoms minister Ravi Shankar Prasad has insisted that the financial burden of the recent spectrum auction will not lead to tariff increases, following comments from global industry body the GSM Association (GSMA) and ratings agency Fitch Ratings that the INR1.099 trillion (USD17.49 billion) auction would put the nation’s telcos under pressure, the Economic Times writes. The GSMA’s chief regulatory officer Tom Phillips commented that: ‘These high prices will put increased financial pressure on operators and ultimately have a negative impact on consumers, reducing the value derived from the spectrum and hindering future economic growth and social gain in India.’ The official’s sentiments were echoed by Fitch, which was quoted as saying that the extra pressure would limit telcos’ ability to invest, and that the operators: ‘Are likely to raise headline voice tariffs in response to high spectrum prices…However, the extent of tariff increases is likely to be affected by the impending entry of Reliance Jio Infocomm (RJIL).’