Mobile phone tariffs likely to rise

Mobile phone tariffs likely to rise

 Customers may lose freebies or have to pay a little more for mobile services in the days ahead, as telecom operators try to make up for Rs 61,100 crore they have committed to the government in the latest spectrum auction.

Analysts are of the view that to maintain their profitability, telecom operators will cut freebies and discounted minutes immediately, and may also hike tariffs gradually.
Marten Pieters, CEO of the country's second largest service provider Vodafone, said the mobile telecom industry has reached a point where annual tariff increases are required 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 at a time when it is yet to recover from the “excesses” of the 2010 auction. “We have had reducing 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,” said Pieters.

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