New Delhi: GSM industry body COAI on Saturday said regulator TRAI's analysis that mobile tariff will rise by 15 paise if spectrum is auctioned at its recommended price is "flawed" and "inconsistent with the market realities".

The industry body, which represents Bharti Airtel, Vodafone, Idea Cellular among others, also said TRAI has revised its estimate from 4.4 paise hike earlier to 15 paise which is an acknowledgement of COAI's earlier assessment that the impact on tariffs could be much higher.

"The TRAI's objective behind the exercise appears to be a pre-determined answer to an already arrived-at conclusion and an attempt to defend its earlier position on the matter," COAI said in a statement.

The industry body said TRAI changed its assumptions on the growth of total minutes in its bid to achieve a pre-defined conclusion.

This was the second time, TRAI was asked to give its analysis of impact on mobile phone tariffs if government approves minimum rate for airwaves approved by it for auction.

The regulator has come under sharp criticism from industry players after recommending a minimum price for auction of spectrum of over Rs 3,622 crore for a unit of airwaves. This amounts to over Rs 18,000 crore for pan-India operations in case of a new entrant.

Trai has recommended to fix double of this amount as minimum price for the airwaves that existing telecom operators use to provide wireless services at the time of renewal of their licences.

Telecom operators have been maintaining that the approval of regulator's recommendations in its orginal form may lead to a rise in existing tariffs by up to 100 per cent.

COAI said TRAI has again missed out many parameters on which it should calculate the impact of airwaves price on tariff for consumers.

The industry body pointed out that TRAI has not taken elasticity of demand into account. "The increases in tariff, as a result of higher cost, could result in lower usage by subscriber, this will further lower the total minutes of use. Also, since subscribers are expected to grow at 6-7 per as per TRAI, total minutes cannot grow at 14-15 per cent," COAI said.

It further added that the assumption on cost increase is completely understated as against the current industry scenario and these calculations seem to be "goal seeking", as against trying to analyse the "true" impact on the industry and the common man.


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