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 at a time when it is yet to recover from the "excesses" of the 2010 auction. "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, who is Vodafone India Managing Director and Chief Executive Officer, told PTI.
Bharti Airtel, Vodafone and Idea Cellular, the three biggest mobile service providers in the country, and Reliance Jio were among eight companies that bid a combined Rs 61,162 crore for spectrum in the 900 MHz and 1800 MHz bands offered by the government during a 10-day auction that ended on February 13. "The industry has not yet recovered from the excesses of the 2010 auction and this auction, combined with others expected in the next couple of years, will worsen the industry's health further," Pieters added.
The country's mobile subscriber base is currently 88.1 crore, according to TRAI.