Mobile operators and telecom equipment makers on Tuesday contested the Department of Telecom's (DoT) calculation on the impact of the recent spectrum (airwaves) auction on tariff.
"We will be happy to understand the government's calculation on the impact of thespectrum auction and the increased financial burden on the industry if tariffs are not increased in proportion to the huge payouts," the Cellular Operators Association of India (COAI) said in a statement.
In the latest spectrum uctions conducted over three weeks from March 2-24, the central government had raked in $18 billion from eight telecom operators, as the bids were amongst highest by global standards.
The industry body disputed the basis on which Communications and IT Minister Ravi Shankar Prasad stated that tariffs should not increase beyond Rs. 0.013 per minute, as the spectrum had been given for 20 years when the industry's annual expenditure is expected to be Rs. 5,300 crores per annum,
The industry's analysis of the financial implications of the e-auction, however, indicates a steep increase of 12-15 percent on the present tariffs to make up for the cash outflows of the cellular operators, the COAI said.
"DoT has not factored inflation in its calculation though inevitable on a 20-year-period. At the current annual inflation rate of 6-7 percent, its impact will be a hefty sum, pushing the tariffs significantly," it said.
The industry association also expressed concern on the government not taking into consideration the interest burden on the debt the industry will have to raise for meeting the spectrum requirements.
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