Communications Minister Kapil Sibal Tuesday assured telecom service providers that the government will look into their grievances against the sector regulator's recommendations on spectrum auction.
For the second time in one week, the GSM operators met the minister to press the government not to accept the Telecom Regulatory Authority of India's recommendations on reserve price and go by its theory that there would not be more than two paise hike in the tariffs if they are accepted.
In an earlier meeting May 2, Sibal had asked the operators to explain the reason behind the huge difference between their and TRAI's calculation on the affect on tariffs post implementation of its recommendations.
The operators had warned that there cold be a 100 percent hike in the tariffs if the implementation recommendations were accepted.
The operators informed the minister that with a tariff hike, consumption will go down and TRAI had not taken this aspect into consideration.
"As the prices rise, the consumption goes down. And it has been absolutely assumed as if the consumption will remain constant which is not correct," Sanjay Kapoor, chief executive officer (CEO) -- India and South Asia, Bharti Airtel, told reporters after meeting the minister.
"There will be circles which will have more than a 100 percent price hike, if they were to absorb the impact of what is being recommended," he added.
Kapoor also said that in one circle the cost of spectrum the reserve price is Rs.7 crore and on other end there are metros where it is Rs.717 crore, which is a 100 times differential.
The firms also informed the minister about the possible implications of re-farming of spectrum.
"It is very sad that the industry will have to invest Rs.1,25,000 crore of capex and Rs.25,000 crore of operating costs additionally to just protect the existing revenues," Kapoor said.
"This will also include write offs of Rs.25,000 crore worth of assets which will not be used by the industry because 900 will not exist," he added.
Apart from Kapoor, Vodafone India Chief Executive Marten Pieters, Idea Cellular Managing Director Himanshu Kapadia, Telenor Chief Representative Officer Rajiv Bawa and Videocon Chief Executive Officer Arvind Bali attended the meeting.