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Airtel hikes data rates in India following 4G auction

Indian market leader Bharti Airtel is pushing up prices for its prepaid 2G and 3G data subscribers to offset its recent investment in 4G spectrum.

The increase is more pronounced for 2G subscribers, who will now receive 1.25GB of data for INR199 ($3.10) instead of 2GB. Meanwhile, the price of 1GB of 3G data increased from INR249 to INR255.

The trend of increasing data rates is growing across India, with Idea Cellular recently hiking data prices by as much as 100% in New Delhi. The operator doubled 2G prices and increased 3G rates by up to a third, and plans to extend these rates into other regions of India. Vodafone India is currently “evaluating a response” to its rivals’ increased tariffs.

The price hikes follow on from the country’s 4G spectrum auctions, which saw many operators laying out vast sums of money to obtain airwaves. Idea led the spending, shelling out INR303 billion for 79.4MHz of spectrum in order to renew its licences. Airtel meanwhile spent INR291 billion for 111.6MHz of spectrum in the 900MHz, 1.8GHz and 2.1GHz bands.

Following the auctions, many observers predicted that the eight bidding operators would raise their prices to compensate for their bids, which totalled a record-breaking INR1.1 trillion ($17.6 billion). In April, TRAI’s outgoing chairman noted that operators would need to raise mobile data rates by around 15% to offset their investment.

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