The Telecom Regulatory Authority of India has said that the mobile tariffs in the country could rise 5-10 paise due to spectrum pricing.

If the proposal for the new spectrum pricing is accepted by the authorities, the telecom service providers might pass on the increase to the customers and as a result tariffs might rise in the country. Telecom companies have said that the tariff might rise as much as 90 paisa due to the pectrum pricing.

TRAI had earlier proposed to fix the reserve price for 2G spectrum auction at Rs 18,000 crore for 5 Mhz. Chairman, Dr Rahul Khullar told the Empowered Group of Ministers that the profitability of telecom service providers will increase if the tariffs are raise by just 5 paisa.

The union cabinet had earlier deferred a decision on the reserve price for the 2G spectrum auction as the Empowered Group of Ministers (EGoM) meeting to discuss the matter was postponed indefinitely. Besides decision on base or reserve price, the EGoM might also discuss the possibility of mortgaging spectrum by the telecom companies for obtaining loans and financial assets.

The Supreme Court has set a deadline of 31 August for completing the 2G spectrum auction, which is required following scrapping of the 122 licences in February. However, as the key EGOM has been deferred, the decision of the reserve price is unlikely soon. This indicated that the government is likely to miss the deadline for the auction of the 2G spectrum.