Even as telecom operators are struggling to deal with declining profitability and climbing debt levels, the new telecom policy has envisaged an investment of $100 billion by 2022 in the communications industry.

Market experts pointed out that the Centre will have to do a number of things to offer relief to the telecom industry if these investments have to be made in the near future.

“Industry had suggested for allowing tax-free bonds for telecom sector. The industry had also recommended that the telecom/telecom infrastructure industry should also be made eligible for access to long-term and low-cost debt to be provided by infrastructure debt funds and also establishment of Telecom Finance Corporation (TFC)/infrastructure bank to provide loans at preferred rates to telecom companies. Hope these issues will also be addressed in this policy as well,” said a senior executive of the Cellular Operators Association of India.

Industry observers point out that fresh investments can be made once the current taxes and levies imposed on the operators are reduced substantially.

Telecom operators pay nearly 30 per cent of their annual income to the government in the form of taxes, spectrum usage charge and licence fees. “The new policy has mentioned that the taxes and levies need to be rationalised but there is no time frame as to when this will happen. On the other hand they have fixed a time frame of 2022 for the $100-billion investment. Where will the money come from and who will make this investment is the big question,” said a telecom analyst.

“The proposal to reduce telecom fees and levies have been talked about for over 5 years but successive Governments have not resolved this issue. The key point here is how will the Telecom Ministry persuade the Finance Ministry to give up revenues,” said another industry observer.

Related Topics
comment COMMENT NOW