Bumper bids in 2G spectrum auction, but users may be losers | business | Hindustan Times
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Bumper bids in 2G spectrum auction, but users may be losers

business Updated: Feb 05, 2014 09:26 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Mobile phone bills of subscribers in Delhi, Mumbai and Kolkata may go up if aggressive bidding, as witnessed on Day 2 of the 2G spectrum auction, continues as on Tuesday but operators in other parts of the country could cut airtime rates.

At the end of Tuesday, 14 rounds of bids were placed. These are expected to mobilise about Rs. 42,000 crore against the budget target of Rs. 46,000 crore. Several more auction rounds are due in the next couple of day could, by the end of the auction process, fetch the government more than Rs. 50,000 crore.

A senior executive of a leading telecom operator, bidding aggressively in the three metros for the 900 MHz bandwidth, said: “If the bid price rises to Rs. 45,000 crore to Rs. 50,000 crore, investors and operators will panic.”

“At the end of bidding, we will have to evaluate the impact on tariffs the final bid amount will have,” said Rajan Mathews director general of Cellular Operators Association of India, the apex body of GSM operators. “Some of it will be passed on to the consumer.”

However, communications minister Kapil Sibal told HT: “Voice and data prices will not escalate. If companies like Bharti Airtel have announced profit after four years, others will too. So, where is the question of prices going up?”

But mobile operators currently follow the so-called forbearance clause that allows them to fix tariffs without intervention of the telecom regulator.

Many bundled components are currently enjoyed free — like 1,000 free SMSes, or 100 hours of free data. These, and other freebies, can be charged to make up for the high cost of spectrum.

Sources in the department of telecommunications said if the bids in 1800 Mhz continue to be damp on Wednesday, it could indicate the end of the auction by Thursday noon.