The Department of Telecommunications has asked the finance ministry to offer some GST-related relief to Telco’s and to bring down import duties of network equipment, but the ministry is not considering any other company specific relief measures as sought by Vodafone Idea. Speaking to reporters on Tuesday, telecom secretary Aruna Sundararajan said the industry needs to speak in a cohesive voice while seeking further financial relief. Sundararajan was speaking after a meeting of the Digital Commission and her comments come a day after industry body Cellular Operators Association of India (COAI) wrote to telecom minister Manoj Sinha, urging that the Rs 35,000 crore input tax credit due to Telco’s from the government be adjusted against spectrum payments and levies as a measure to help carriers overcome financial distress. But, the letter added, that Jio has a dissenting view on the matter. The industry had also called for a rollback of the basic customs duty increase on several telecom equipment in October 2018 and the duties imposed on printed circuit boards used in them in a bid to curb non-essential imports and address its current account deficit as well as encourage the ‘Make in India’ initiative.
What is the significance in the telecom sector?
- Telecom sector has immensely contributed to the GDP growth rate of India (approximately 6%).
- There has been an increasing penetration of smartphones in the country.
What are the challenges faced by telecom sector?
- We have very low penetration of fixed line. When the private sector came into the picture, they employed network using cellular technology which has limitations in terms of download speed. Therefore, our speed hasn’t increased.
- The telecom equipments which connects the consumer are expensive.
- As of now, the present model of providing cheap data is not sustainable.
- A lot of talent pool in the country which is brining new innovations like AI, IoT is not rightly aligned.
- Govt’s flagship program Digital india is aligned with telecom sector growth
- Govt recently launched National Digital Communication Policy which calls for broadband for all
- Bharat Net project aims to provide last-mile connectivity by connecting all the panchayats
- We lay a lot of fibre and prepare ground for easy write of way cost.
- licence fees and spectrum usage charges need immediate attention.
- If data is the new currency, we need to have adequate infrastructure
- We must take account for the rising NPA.
- We need to move to %G technology.
- Optic fibre technology must go to each village.
- Recently, inter-ministerial group for recommending solutions on the telecom sector suggested that there was no need for any major policy changes due to signs of recovery. Its recommendations include
- deferring spectrum and license fee payment from 10 to 16 years without any reduction
- reducing interest charges by 2%
- not easing of spectrum limits on consolidation
- interconnection charges to be decided by TRAI
- Other recommendations
- Adopt infrastructure sharing fully among multiple operators (through two or three consortiums) to reduce costs
- Approach spectrum as a shared public resource, giving secondary access at reasonable revenue-sharing charges, example for TV white space
- Allocate spectrum for wi-fi conforming to global standards