Govt eyes windfall, call rates may go up

The cabinet on Friday fixed a Rs. 14,000-crore reserve price for the telecom spectrum auction that could fetch the government at least Rs. 41,650 crore.

The cabinet on Friday fixed a Rs. 14,000-crore reserve price for the telecom spectrum auction that could fetch the government at least Rs. 41,650 crore.
Although telecom operators complained this would treble call rates, sector watchdog Trai argued that tariffs would not increase by more than four paise a minute from the average 45 paise a minute at present.

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“Tariffs will go up anywhere between 30 and 80 paise because of the high reserve price,” said SC Khanna, secretary general of the Association of Unified Service Providers of India.

The empowered group of ministers, headed by finance minister P Chidambaram, will meet on Monday to finalise the new schedule and approach the Supreme Court for a deadline extension, as the court had fixed August 31 for spectrum auction and allocation.

Following the Rs. 1,76,000-crore 2G spectrum scam, the Supreme Court had in February cancelled the 122 telecom licences awarded in 2008 on grounds that these were arbitrarily granted.