While Vodafone and Airtel were compelled to win the spectrum auctions by bidding higher so as to continue their operations, the consumers may have to bear the brunt with possible increase in tariffs.
Both Vodafone and Bharti Airtel together pumped in almost Rs. 38000 crores to win the spectrum auction. While the government became richer by a whopping Rs. 61162 crores, the service providers may increase tariffs to cover up for the extremely high cost and huge investment. Analysts even predict that this could affect future network rollouts and other advancements.
However, India being a very competitive and difficult market, raising tariffs doesn’t seem to be a favourable option especially given that some operators do not have to pay the same cost for spectrum. While pausing advancement seems like a relevant option, it would definitely hurt the customers waiting for connectivity or higher bandwidth.
Speaking about the situation, Sanjay Kapoor, former Bharti Airtel CEO said, “Tariffs going up is inevitable. Operators will either have to take a hit on their margins or pass it on to consumers. It will be a balance of these two. The companies may cut freebies and discounts to increase their realized tariffs.”
