Firms warn of price rise disaster

New Delhi : Indian phone company chiefs yesterday slammed proposals for a sharp hike in the price of mobile spectrum, saying it would raise calling tariffs and potentially destroy the fast-growing sector.

In a rare show of unity in the fiercely competitive industry, top executives of Bharti Airtel, Vodafone, Idea Cellular, and other leading mobile companies joined forces to denounce the proposed price increase.

"It would be a disaster. These plans will ring the death knell for the Indian telecom industry," Sanjay Kapoor, president of the Cellular Operators Association of India (COAI) said in New Delhi.

Court order

The high prices are "completely unsustainable" for an industry that must make huge investments to roll out networks in remote areas, said Kapoor, who is also chief executive of Bharti Airtel, India's largest mobile company by subscribers.

The Telecom Regulatory Authority of India (TRAI) suggested last month a base price of $678 million (Dh2.49 billion) for one megahertz of pan-India spectrum — 10 times the price at which 2G licences were allocated in 2008.

The spectrum is to be sold by auction after the Supreme Court cancelled 122 permits awarded in 2008 to eight operators on the grounds that the sale process was underpriced and corrupt.

The court ordered the government to reallocate the airwaves through a transparent competitive bidding process.