Ravi Shankar Prasad counters reports of higher telecom tariffs

Telecom Minister Ravi Shankar Prasad countered reports of industry experts on Thursday that claimed mobile call rates would go up because of the high payment made by telcos for the spectrum they bought in the auction would push up their debt to about Rs 3.5 lakh crore.

Offers of a record Rs 1.09 lakh crore were received from leading operators like Idea, Bharti Airtel, Vodafone and Reliance Telecom, which works out to a 68-per cent premium over the Rs 65,463.40 crore figure estimated at the base price fixed by the government.

"I am seeing a huge campaign that mobile rates will go up. A person very familiar with telecom industry has given me analysis. The spectrum will be with operators for 20 years. As per the analysis, the yearly load on telecom operators is going to be about Rs 5,300 crore ... and 1.3 paise per minute call," Prasad told reporters in the national capital.

Earlier during the day, Associated Chambers of Commerce of India's telecom council chairman T.V. Ramachandran had said, "Telecom industry, which was already saddled with nearly Rs 2.5 lakh crore, is now going to helplessly see it mount to nearly Rs 3.5 lakh crore."

Like Union Finance Minister Arun Jaitley, Prasad also took a jibe at his predecessor and Congress leader Kapil Sibal over the 'zero loss' theory . "I believe when entire regime is conducted in fair and transparent manner, people do trust. I would like say one thing to my esteemed predecessor, who talked about zero loss that if they would have done what I have done, they would have got same result," Prasad said.

Prasad's logic was based on the fact that of the record Rs 1,09,874.91 crore received in the 19-day auction, which concluded on Wednesday, the government will get Rs 28,872.7 crore (25 per cent) as up-front payment within ten days while the remaining amount will be paid in annual instalments till 2027.

Prasad wanted the operators to pay the up-front money within six days to help the government meet its Budget targets of the 2014-15 financial year.