Telecom firms want cut in rates, levies

DoT holds meeting with stakeholders

A rickshaw puller speaks on his mobile phone as he waits for customers in front of advertisement billboards belonging to telecom companies in Kolkata February 3, 2014. India is auctioning airwaves in both the 1800 megahertz and 900 megahertz bands, and Reliance Industries, a formidable rival to market leaders Bharti Airtel Ltd and Vodafone Group PLC, has unexpectedly opted to compete for both, sources have said. Spectrum in the 1800 Mhz range would enable Reliance to offer voice services and improved coverage for its 4G Internet service and bidding for the spectrum is expected to be relatively modest given that there is plenty of it and it is less efficient than the 900 Mhz bandwidth. Picture taken February 3, 2014. REUTERS/Rupak De Chowdhuri (INDIA - Tags: BUSINESS TELECOMS)

Ahead of the Budget 2020-21, the telecom industry on Monday asked the government to facilitate funding for firms at a lower rate of interest, while also pushing for reduction in various levies and taxes to help the debt-ridden sector.

The demands were discussed at a meeting between the Department of Telecom and industry stakeholders on Monday. “We have heard their [industry’s] demands and have given time to send in written recommendations till Tuesday. We will then review and forward them to the Finance Ministry for consideration in the upcoming Budget,” a senior DoT official said after the meeting that lasted for about one-and-a half hours.

The pre-Budget meeting was chaired by Telecom Secretary Anshu Prakash and attended by representatives of Bharti Airtel, Vodafone Idea and Reliance Jio, besides industry associations such as Cellular Operators Association of India and Tower and Infrastructure Providers Association.

Reduction in USO

The official added that the industry representatives reiterated the earlier demand for reduction in universal service obligation (USO) fund to 3% and licence fee to 1% as well as refund of accumulated input tax credit. “They have also sought creation of a dedicated fund to be used by purchaser of telecom equipment to help promote Make in India,” the official said.

“We have requested the government to facilitate funding at lower rate of interest to telecom companies to reduce the overall cost of capital and mobilise cheaper funds. Telecom industry is capital-intensive... this will help us plough more funds into network upgradation, maintenance and expansion,” an industry representative said after the meeting.

Other industry representative added that the government had been requested to set up a working group with stakeholders from the DoT, regulator TRAI and industry that will work on preparing guidelines for adopting the principle of input line credit. The industry also pitched that telecom towers be included in the definition of plant and machinery for input tax credit.

Additionally, the operators have demanded removal of GST levied on payment of regulatory levies such as license fee, spectrum usage charge, and payment on spectrum acquired in an auction.