3G services will not come cheap: Bharti

chief

Prime VIP
New Delhi, July 11

As was expected, the first round of warning that the services in the next generation 3G spectrum would not be cheap has come. Bharti Airtel has said since telecom operators had to pay dearly in the auction to acquire the 3G spectrum, the services thus rolled out will not be cheap.

"Take the example of Delhi or Mumbai. The amount for spectrum that has been charged is close to Rs 3,500 crore each... Just to recover licence fees and input cost, it works out to be Rs 700-900 per month," Bharti group chairman Sunil Mittal has said, a news agency reported.

Airtel was one of most successful bidders in the auction winning 13 circles, including Delhi and Mumbai, at a total cost of Rs 12,295.46 crore, the highest among service providers.

The company could not achieve the objective of a pan-India 3G footprint as the prices rose beyond a reasonable level due to various factors like the auction format, a severe shortage of spectrum and also ensuing policy uncertainty, it had said.

Incidentally, Bharti, Vodafone and Reliance Communications managed to win 3G spectrum in Delhi and Mumbai, which could lead to a tariff war in these two metros.

Elaborating on the rationale for differential tariffs, Mittal said, "My view is that certain circles, it will be circle dependent, like C circle and all will not be very expensive, but in circles that have gone very high in the 3G auction, price will have to adjust for itself."

"The pricing of subscriber tariffs have to be based on the input cost. Any industry relies on input cost and here, the input cost is spectrum and it has gone high," he said.

Since Bharti did not get pan-India spectrum for 3G, the company has started a dialogue with operators in circles where it is not present for an arrangement to offer undisrupted 3G services to its subscribers.
 

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