2G effect: Mobile tarrifs likely to go up

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New Delhi, Feb 3: With the Supreme Court verdict to scrap off 122 licences of telecom companies, the step will soon affect those companies as mobile tarrifs are likely to go up, said reports.

Reports reveal that the Supreme Court order will bring new players to the field, while other indicted companies will see a shameful exit from the business.

"Tariffs were bound to go up even before the ruling. If the new operators now have to win licences through an auction bid and get back spectrum, there will be costs. Some of this will have to be passed on to the consumer," said Romal Shetty, KPMG India’s telecom head.

Already under pressure, telecom giants like Airtel and Vodafone had to pay a huge amount in the 3G auction. There is a possibility that these companies would increase the tarrif to compensate for their loss. Vodafone, Bharti Airtel and Idea, among many others owing to pressure on their margins, had hiked their call rates last year by 20%.

According to Mahesh Uppal, Top telecom analyst and director of consultancy firm Com First India, said that though the tarrifs may go up, its is not likely to get prohibitively high. The telecom companies whose licences were quashed by the Supreme Court will also be under pressure as they will have to pay a one time charge for holding licences over 6.2 Mhz.

These companies will also be entitled to come up for renewal soon and will have to pay the current market price for the spectrum they hold, said reports.

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