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The era of cheap mobile tariff is likely to get over as Supreme Court order on Thursday takes out new players who had brought call rates as low as 1 paise per second.

The balancesheets of the old telecom companies, including Airtel and Vodafone, were already under pressure due to the huge amount which they paid during the 3G auction and now, they are likely to compensate it by increasing the tariffs. Last year, Bharti Airtel, Vodafone and Idea, among others, had hiked their call rates by 20 per cent due to pressure on their margins.

“Tariff was bound to go up even before the judgment. If the new operators now have to win licence through auction bid and get back the spectrum there will be cost. Hence some of the cost will have to be passed to the consumer,” said Mr Romal Shetty, national head (telecom) KPMG India. Noted telecom analyst and director of consultancy firm Com First India, Mahesh Uppal said that while the tariff will go up, they will not become prohibitively high.

Though the Supreme Court judgment has cancelled the licences of the new players, old players are also likely to come under pressure as the telecom department is looking to charge them a one-time fee for holding excess spectrum over 6.2 Mhz. Also the licences of most of the old players are coming for renewal and they will also have to pay the market price for the spectrum which they are currently holding.

However, telecom regulator Trai has warned that it will keep a watch on the mobile tariffs and is coming on with a consultation paper on whether it should intervene to fix call rates.

-dc chn