New Telecom Policy, May Cause Price Hike

The telecom density in India is in a fastest growing stage around the globe. The competition between operators helps us to enjoy the cheapest voice-call tariff in the world. However, new telecom policy there is some major changes, which may make telecom service costlier than now. Telecom Minister Kapil Sibal today said all operators would have to pay market price for initial as well additional spectrum from now. Asked

Sibal said,

In future, the spectrum will not be bundled with licence. The licence to be issued to telecom operators will be in the nature of ‘Unified Licence’ and the licence holder will be free to offer any of the multifarious telecom services”.

“In the event, the licence holder would like to offer wireless services, it will have to obtain spectrum through a market driven process.

In this scenario, it is clear that if new operators have valid license as well as 4.4 MHz starter spectrum, still they have pay market price for addition 1.8 MHz spectrum, which can be harmful for them as they are struggling to make a stable position in market. In case of old operators who are holding spectrum beyond 6.2 MHz, will have to pay for it.

The previous 2G scam makes central ministry more concern that they want to make pre-calculated footstep to avoid any further controversy which was clearly reflected by Sibal’s speech,

We need to seriously consider the adoption of an auction process for allocation and pricing of spectrum beyond 6.2 Mhz while ensuring that there is adequate competition in the auction process.

Anirban

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