With Department of Telecommunications (DoT) likely to discuss and analyse TRAI recommendations on 2G spectrum auction on Thursday, COAI and GSM industry lobby on Tuesday presented a report saying that the call rates will go up as high as 90 paise a minute in metros and 20-34 paise on an average across the country if the regulator's recommendations are accepted.
The report prepared by PricewaterhouseCoopers (PwC) said that the TRAI recommendations which seek to increase the reserve price for auction many fold would have a significant impact on customers and operators.
"Our study reveals that the impact on consumers could be very considerable and also that the industry is not ready to take any further deterioration of its financial performance," Mohammad Chowdhury, leader telecom, PwC India, told reporters.
COAI has already made it clear that the TRAI’s actions seem to be directed towards creating unnecessary constraints for the sector, overlooking the universal rules of sustainability and growth for this sector.
“Under such inconsistent, regressive and uncertain regulatory environment, it is inconceivable that the telecom industry, which is already in a state of doldrums, will be able to deliver on the Government’s vision of affordable communications, rural penetration and rollout of data services ,it had said reacting to TRAI proposals.
Contrary to what the operators are saying, the regulator’s own calculations are that the increase would be only of over four paise per minute. Currently, the operators on an average are offering call tariffs of around 75 paise per minute.
"TRAI's calculations are fundamentally flawed. This would affect the people at the bottom of the pyramid significantly, "said Rajat Mukherjee, chief corporate officer, Idea Cellular.
"On the other hand if the operators don't increase tariffs, they go out of business. The impact will be on competition if the competition decreases, the tariffs rises," he added.
The PwC report slammed the Trai's assessment that the share of non voice services would grow to 50 per cent of the revenue of a firm by 2020.