Mobile phone tariffs are set to increase and freebies and discounts likely to be further brought down, leading mobile service providers made it clear.
The fresh spectrum purchases at the recent auction were being cited as one of the factors for the likely rise in tariffs. Marten Pieters, the CEO of the country’s second largest service provider Vodafone, said the mobile telecom industry has reached a point where annual tariff increases are needed to sustain itself.
Pieters also said the recent spectrum auction combined with others expected in the next couple of years will worsen the health of the mobile telecom industry. “We have had declining tariffs for 18 years; this cannot be sustained forever. We believe the point has come where we will have to increase our tariffs every year, depending on cost levels,” Pieters said.
“Spectrum in India is expensive: we pay a lot per MHz in an auction and then 5 per cent of revenue in the form of spectrum usage charges. This will invariably have consequences,” he added.