Source : Economic Times
MUMBAI: Data business is not loss-making despite the high
prices that companies have paid for third generation (3G) airwaves, Idea
Cellular chief executive Himanshu
Kapania said in an interaction with ET. Kapania said voice call rates will
go up 50 per cent to 100 per cent if the government accepts telecom regulator's
proposal for a steep hike in spectrum costs. India is slated to have
spectrum auctions in August as directed by the Supreme Court. "The era of hyper
competition ushered a business model where today 90 per cent of the Indian
population has access to mobile services. This full competition model will
permanently change, if (the) proposed spectrum auction pricing is approved,"
Kapania said. "We are very clear in our mind that the current return on capital
does not allow Indian operators to absorb this cost."
In February this year, the Supreme Court reversed all local licences, given under controversial circumstances by former telecom minister A Raja. Idea Cellular lost nine licences, of which seven were in use. "The capital investment in rural markets and newer technologies deployment will be pushed back in time and markets may move back to natural inefficient monopolies," Kapania said.
The Telecom Regulatory Authority of India (Trai) has proposed an auction of the vacated airwaves at a price that is 13 times the 2008 price. The empowered group of ministers on telecom on spectrum has decided that a maximum of 13.75 MHz will be sold in the 1,800-MHz band in every region. This will allow maximum of two companies to win back their mobile permits in every circle.
Though companies have maintained that the high cost of 3G airwaves has hurt operating margin in unsustainable measure, operators have recently slashed rates to allure more data users on the 3G network. Idea Cellular has launched three phones, including a recent dual SIM card phone, based on Android software to spread data usage to lower income homes.
In February this year, the Supreme Court reversed all local licences, given under controversial circumstances by former telecom minister A Raja. Idea Cellular lost nine licences, of which seven were in use. "The capital investment in rural markets and newer technologies deployment will be pushed back in time and markets may move back to natural inefficient monopolies," Kapania said.
The Telecom Regulatory Authority of India (Trai) has proposed an auction of the vacated airwaves at a price that is 13 times the 2008 price. The empowered group of ministers on telecom on spectrum has decided that a maximum of 13.75 MHz will be sold in the 1,800-MHz band in every region. This will allow maximum of two companies to win back their mobile permits in every circle.
Though companies have maintained that the high cost of 3G airwaves has hurt operating margin in unsustainable measure, operators have recently slashed rates to allure more data users on the 3G network. Idea Cellular has launched three phones, including a recent dual SIM card phone, based on Android software to spread data usage to lower income homes.
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