With telecom industry revenues coming under pressure and funding becoming difficult, the Union Telecom Ministry on Monday proposed the infrastructure status for the sector and suggested rationalising of taxes and levies.
“We will approach the Finance Ministry for rationalising taxes and levies affecting the sector and work towards providing a stable fiscal regime to stimulate investments and making services more affordable,” Telecom Minister Kapil Sibal said, while unveiling the draft National Telecom Policy, 2011.
The telecom industry has been demanding lowering of taxes saying the levies in India are among the highest in the world and with tariffs as low as 0.5 paise per second, the revenues are falling, affecting investments in the telecom sector. According the infrastructure status to telecom would make financing easier, Mr. Sibal said.. The NTP also proposes to create a special purpose Telecom Finance Corporation as a vehicle to mobilise and channelise financing for telecom projects to facilitate investment in the telecom sector.
It would be an endeavour to include telecom sector projects within the ambit of financing from existing entities such as India Infrastructure Finance Company Ltd. (IIFCL), the Minister said.
Telecom firms are paying up to 10 per cent annual licence fee, besides 8 per cent spectrum charges and contribution towards the Universal Service Obligation (USO) Fund as percentage of Adjusted Gross Revenue.