Second set of reforms for the telecom sector soon

The government will come out with a second set of reforms for the telecom sector, which will include rationalisation of levies and restructuring of the licensing regime, after the finalisation and passage of the new Telecom Bill, communications minister Ashwini Vaishnaw said on Sunday.

“Our next set of reforms will happen immediately after the Telecom Bill is enacted. We will be significantly simplifying the licensing regime,” the minister said on the second day of the ongoing India Mobile Congress here.

The industry has long been demanding that the levies on it be reduced. Currently, various levies account for 30% of the total revenues of the operators.

Reduction in licence fee is another of industry’s demand. Currently, operators pay 8% of their adjusted gross revenue as licence fee. Of this 5% goes into the universal service obligation fund (USOF) and balance 3% to the exchequer.

The industry has demanded that since 49% of USOF is unutilised, this levy should either be reduced or frozen till the funds are fully utilised.

The industry is also demanding a cut in GST rate of 18% as telecommunication is an essential service.

On Saturday, Aditya Birla Group chairman Kumar Mangalam Birla said that critical policy interventions by the government in the telecom space had boosted investor confidence and he hoped that the sector will continue to receive policy support.

In September last year, the government had simplified a number of structural and procedural reforms for the sector to promote healthy competition, protect consumers’ interest, infuse liquidity, encourage investment and reduce the regulatory burden on telecom service providers.

The reforms also included moratorium on regulatory dues of telecom operators, rationalisation of adjusted gross revenues and bank guarantees and allowing 100% foreign direct investment through the automatic route.

“We addressed the most pressing issues in September last year, then we looked at the WPC (wireless planning commission) reforms. The reforms related to RoW (right of way norms) has been dealt with in the Telecom Bill,” Vaishnaw said.

On the draft Telecom Bill, the minister said he has received feedback on the subject whether over-the-top (OTT) services should be covered as part of telecom services and be brought under licensing.

“Immediately after the IMC (India Mobile Congress), we will have a roundtable with industry and other stakeholders to discuss the final draft of the Telecom Bill,” Vaishnaw said.

In the draft Bill, the government has proposed regulation of OTT services provided by the likes of WhatsApp, Signal and Telegram.

Last month, the minister had clarified that the government will have light-touch regulations for OTTs.

However, a section of industry has opposed bringing OTTs under any form of licensing regulation arguing that it would kill innovation. Further, there’s some overlap here as information & broadcasting ministry and ministry of electronics & IT currently oversee certain aspects of OTTs as part of IT Rules. Financial Express