Rahul Khullar, Chairman of Telecom Regulatory Authority of India (TRAI) has said that the price of telecom spectrum is not the primary determinant of mobile phone tariffs and the telecom service providers fix the price on eth basis of various other considerations.
Mr. Khullar said that the spectrum prices is not the source of concerns in the telecom market. He was speaking at an event organised by the Federation of Karnataka Chambers of Commerce and Industry (FKCCI). He said that the actual source of the problems faced by telecom service providers in the country is due to legacy decisions taken by the service providers earlier.
Mr. Khullar stressed that the tariffs are not fixed on the basis of spectrum prices and are determined on the basis of choice of technologies and the estimate of the demand for services. The costs are also influenced by the decision to either import equipment from abroad or to source it locally.
"These decisions, and a host of others, have a bearing on mobile telephony tariffs, not the price of spectrum alone," Mr. Khullar said.
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 spectrum pricing.