India’s telecom companies are hoping for clarity in regulatory matters and rationalization of taxes as the new government at the Centre settles down. The telecom industry has often complained about time-consuming procedures and delayed approvals by the department of telecommunications (DoT). New communications minister Ravi Shankar Prasad has promised to address these issues.
DoT officials became overcautious after the procedures that led to the telecom spectrum scandal prompted criticism from the Comptroller and Auditor General and the courts, culminating in a 2 February 2012 Supreme Court verdict that cancelled 122 telecom licences issued in 2008. The court order said procedures followed in allotting licences and spectrum to nine companies were flawed.
Tax rationalization is another key demand by telecom companies that pay 26% of revenue to the government in licence fees, spectrum usage charges, taxes and other fees. Meanwhile, the heavily capital-intensive sector has to continue investing in new technologies in some parts of the country while they simultaneously roll out older technologies in other parts. India’s telcos had collective debt of Rs.2.4 trillion in 2013, according to a presentation made by Cellular Operators Association of India (COAI), the main lobby group for GSM operators in the country, to Prasad. On 27 May, lobby group Associated Chambers of Commerce and Industry wrote to minister Prasad seeking infrastructure status for telcos, lower regulatory costs, spectrum auctions and encouragement for domestic manufacturing “to reinvigorate the industry and revive investor sentiment”.
A large amount of spectrum is currently lying unused with the government, either because of inadequate efforts to allot it for telecom services, or due to differences between the communications ministry and the defence forces, information and broadcasting ministry and the department of space. The industry wants all available spectrum to be auctioned and put to use immediately. At a meeting in May after he took charge as the new communications minister, Prasad said the government’s main focus would be creating broadband highways, apart from improving service quality and restoring investor confidence.
The government is working on several steps to encourage telecom equipment manufacturing within the country, including deferred excise duty payouts without interest, 10-year tax holidays and a Rs.1,000 crore telecom innovation fund. “We are hopeful that the new government will aid us in helping maintain a long-term clear, stable, predictable, development-oriented and investor-friendly policy regime, which recognizes the long-term nature of the investments and long project maturity requirements of the telecom sector,” said Rajan S. Mathews, director general of COAI. “India accounts for just 11% of the total investments in the Asia-Pacific region compared to China, which accounted for nearly 50% of the investments in the region in 2012-13,” he added.
Source: LiveMint
DoT officials became overcautious after the procedures that led to the telecom spectrum scandal prompted criticism from the Comptroller and Auditor General and the courts, culminating in a 2 February 2012 Supreme Court verdict that cancelled 122 telecom licences issued in 2008. The court order said procedures followed in allotting licences and spectrum to nine companies were flawed.
Tax rationalization is another key demand by telecom companies that pay 26% of revenue to the government in licence fees, spectrum usage charges, taxes and other fees. Meanwhile, the heavily capital-intensive sector has to continue investing in new technologies in some parts of the country while they simultaneously roll out older technologies in other parts. India’s telcos had collective debt of Rs.2.4 trillion in 2013, according to a presentation made by Cellular Operators Association of India (COAI), the main lobby group for GSM operators in the country, to Prasad. On 27 May, lobby group Associated Chambers of Commerce and Industry wrote to minister Prasad seeking infrastructure status for telcos, lower regulatory costs, spectrum auctions and encouragement for domestic manufacturing “to reinvigorate the industry and revive investor sentiment”.
A large amount of spectrum is currently lying unused with the government, either because of inadequate efforts to allot it for telecom services, or due to differences between the communications ministry and the defence forces, information and broadcasting ministry and the department of space. The industry wants all available spectrum to be auctioned and put to use immediately. At a meeting in May after he took charge as the new communications minister, Prasad said the government’s main focus would be creating broadband highways, apart from improving service quality and restoring investor confidence.
The government is working on several steps to encourage telecom equipment manufacturing within the country, including deferred excise duty payouts without interest, 10-year tax holidays and a Rs.1,000 crore telecom innovation fund. “We are hopeful that the new government will aid us in helping maintain a long-term clear, stable, predictable, development-oriented and investor-friendly policy regime, which recognizes the long-term nature of the investments and long project maturity requirements of the telecom sector,” said Rajan S. Mathews, director general of COAI. “India accounts for just 11% of the total investments in the Asia-Pacific region compared to China, which accounted for nearly 50% of the investments in the region in 2012-13,” he added.
Source: LiveMint
No comments:
Post a Comment