Telecom sector cries on no mention of tax rebates

Ronendra Singh | | Updated on: Feb 01, 2018

Govt pegs ₹48,661 crore revenue from stressed operators

Unhappy is the telecom sector with the Finance Minister Arun Jaitley’s Budget. Feeling left out they said the Budget 2018-19 did not have much for the telecom sector, and the government also did not make much target revenue as it expected from spectrum auctions in the last year’s Budget.

It has pegged 58 per cent increase in revenue at ₹48,661.42 crore from the stressed telecom sector in 2018-19 against the revised revenue estimate of ₹30,736.47 crore for the current fiscal.

The government had made a provision of ₹44,342.2 crore revenue from telecom services in 2017-18, through licence fee and spectrum usage charges, from telecom operators.

It was quite higher in the previous year because the government expected much from spectrum auctions, and according to analysts and industry experts, the spectrum auctions that give higher revenues to the government.

There were no auctions last year and the auctions in 2018-19 will depend on Telecom Regulatory of Authority recommendations. The Department of Telecom has sought for views from TRAI on spectrum pricing and timing for the auction.

According to the Cellular Operators Association of India (COAI), the Finance Minister Arun Jaitley had no mention about the telecom sector, which is the backbone digital highway.

“While, the FM has emphasised the importance of moving to a digital economy, the actual digital highway, which is telecom has found no mention in terms of substantive support, unlike road, railway, highways, electricity, which have received substantial mention. We are saddened to see that telecom which is the bedrock for moving the Digital economy forward, continues to remain an Orphan,” Rajan S Mathews, Director General, COAI, said.

He said the sector had sought a reduction in levies and taxes, and an urgent intervention is critical for resuscitating the sector, which is currently experiencing its worst financial health and hyper competition.

“We reiterate our four key asks, reduction extremely high and unsustainable levies and taxes, reduction in BCD on 4G LTE Equipment, clarity on right of way related taxation at the state level, and clarification on lowering the tax rate to one per cent on discounts extended to small dealers,” he added.

But, according to Aruna Sundararajan, Secretary, Telecom, the DoT is already working on National Telecom Policy 2018 and hence it was not much necessary for a mention in the Budget.

“This was Budget…we are having a separate Telecom policy to see some of the other issues. The Budget was on expected lines (for us),” she said.

The Telecom Secretary was hinting on the proposals that the FM has announced for the BharatNet project, for which there is a sanction of another ₹10,000 crore in 2018-19. in the last year’s Budget also, Jaitley had sanctioned ₹10,000 crore out of which ₹7,000 has been utilised till now, Sundararajan said.

Broadband access

The government proposes to set-up five lakh Wi-Fi hotspots that will provide broadband access to five-crore rural citizens as part of this investment.

The DoT has already activated 32,000 Wi-Fi hotspots in some parts of the country over the last one year.

Apart from this, the Finane Minister also announced to harness the benefit of emerging new technologies, particularly the ‘Fifth Generation’ (5G) technologies and its adoption. And, the DoT will support establishment of an indigenous 5G Test Bed at IIT, Chennai, Jaitley said.

“Rollout of five-lakh wi-fi hotspots could be an excellent move for improving connectivity in rural areas and hence bringing them under the ambit of applications and services rolled out under Digital India,” Hemant Joshi, Partner, Deloitte India, said.

Published on February 01, 2018
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