After speculation that India’s operators would need to boost prices following their record payout for 4G spectrum, the third largest operator Idea Cellular is the first to raise data rates by up to 100 per cent in the New Delhi region.
The operator, with a 16 per cent market share, doubled tariffs for prepaid 2G customers and increased 3G data rates by 33 per cent earlier in the week, the Economic Times reported. The operator said the increase would be extended to other regions soon.
Prepaid 2G customers now get 1.5GB of data for INR255 ($4.00) instead of the previous 3GB. For 3G data, INR755 now only buys 3GB, down from 4GB before.
The country’s spectrum auctions, which closed on 25 March, raised a record INR1.1 trillion ($17.6 billion) from eight operators. Idea was the biggest spender – paying about INR303 billion for 79.4MHz of spectrum, with renewals making up the majority of its spending.
The outgoing chairman of the Telecom Regulatory Authority of India (TRAI) said in April mobile rates need to increase by 12-15 per cent to make up for the investments in spectrum.
A month earlier, the Cellular Operators Association of India (COAI) warned that the huge investment would lead to higher tariffs for mobile services in the coming months.
Moody’s said at the end of March that the spectrum auction is credit negative for the industry because it will increase operators’ debt and costs and reduce their ability to fund future expansion.