Telcos upset with TRAI auction proposals, consumers may pay the price

The Telecom Regulatory Authority of India (TRAI) is planning to set the reserve price for the 2G auctions at close to Rs. 3,780 crore which is 1.08 times the 3G reserve price. According to reports, if this is indeed happening, it may well indicate that the consumers will eventually have to bear the brunt. A leading 2G operator mentioned that owing to this, telecom companies will have absolutely no choice but to increase the rates for their subscibers. The source went on to say that, “Take the case of players like Telenor or Sistema, who bagged 2G licenses by paying only Rs 1,650 crore license. If they were to bid again for spectrum which costs over twice the price they paid earlier, they may have to hike charges to stay viable. For existing telcos, too, this could spell trouble since this will become the benchmark price for license renewal going forward. Price hikes could become the order of the day”.

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