After Spending Heavily On Spectrum Auction, Telecom Companies Might Increase Tariffs
The spectrum auctions have come to a close, and the government has received total payment of Rs. 1,09,874.91 crores this time around. But what might be a good amount of revenue for the government, might not be good news for the mobile subscribers in India says Moody, the global financial credit rating agency. It means that the telecom companies might soon hike their tariff’s to make up for lost resources.
Moody said that the high rates of spectrum will tremendously increase debts and is negative for the credit of the telecom companies, and they would increase their tariffs to address the issue. It said that the hike will be gradual so as to keep their market.
Moody also mentioned that the companies would be able to recover a good amount of their departed fortunes with the increase in demand for 3G data plans. Telecom Minister of India, Ravi Shanker Prasad said that as per expert analysis, the annual load on the companies will be Rs. 5300 crore.
The latest telecom auctions saw significant spending on the parts of the network providers. Idea Cellular made a commitment to pay Rs. 30,306.98 crore followed by Airtel at Rs. 29,130.20 crore and Vodafone with Rs. 29,959.74 crores. Other telecom companies too pitched thousands of crores to secure spectrum and stay in business.
It is also being said that due to the massive investment in spectrum acquirement, the companies might slow the expansion of their 3G and 4G services. They might hold off major investments for the next phases of upgrades. So this would also be a disappointment for the users who have been waiting to use their new LTE enabled smartphones to their maximum potential. So dear Indians, brace up, the hike is coming.
