Spectrum Auction: Brace For Higher Mobile Phone Bills

Idea derives 74 per cent of its revenues from these 9 circles, Airtel – 35 per cent, Vodafone – 48 per cent and RCom – 15 per cent, it said.

The ongoing auction would result in more pressure on the companies’ debt profile, CARE said, adding that they are already under pressure.

Companies are required to pay 25-33 per cent upfront on their winning bids, CARE said, adding that this would accrue in revenues of 25,000 crore for the government.

It said that given these circumstances, tariff hikes are “inevitable”, adding that moves by third party applications to offer voice service, which contributes the maximum revenue for telcos, is also a threat.

On Reliance Jio’s entry, Care Ratings pointed out to the highest earnest money deposited by the Mukesh Ambani-led company at 4,500 crore which indicates its intention to have a large amount of spectrum.

“Its aggressive bidding is expected to put existing operators under pressure,” it said, without commenting on its pricing after launch.

The government’s spectrum auction kitty rose to a record 1.08 lakh crore at the end of 13th day of bidding yesterday, with 89 per cent of 2G and 3G radiowaves put on sale provisionally allocated to telecom operators.

However, activity is slowing down, since the premium 900 Mhz band and 2100 Mhz band used for 3G services, did not see bidding for any circles yesterday.
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