Telecom Sector Needs $50-60 Billion To Achieve Policy Goals By 2022

The telecom sector would require somewhere between $50-60 billion to operationalize the National Digital Communications Policy 2018 objectives by 2022, according to a preliminary finding.

In October 2018, the Narendra Modi government has come out with a national policy that aims to attract as much as $100 billion worth of investments and create 4 million new employment opportunities.

“$50-60 billion is required to achieve policy targets by 2022,” EY telecommunication leader Prashant Singhal said, adding that there was a need to come up with recommendations on annual gross revenue (AGR) as well as Goods and Service Tax (GST) to unlock more than Rs 25,000 crore.

There have been various litigations on the AGR while over Rs 25,000 crore is lying with the government on account of GST for which the industry is seeking a refund.

Telcos, barring Reliance Jio, have asked the government to waive GST on spectrum payments and other levies, and in a letter to to the government, lobby group, the Cellular Operators Association of India (COAI) recently said that revenues have declined substantially, the output GST on revenue is unable to absorb input GST credits available.

The Delhi-based group said that nearly Rs 35,000 crore of operator’s capital in the form of excess GST credits have been blocked.

“The government should provide credit for the money that can be further adjusted,” Akhil Gupta, chairman, Bharti Infratel said.

However, Gupta said that there was no dearth of money in the infrastructure side, but the government should ensure that policies should be viable and predictable.

“Predatory pricing should not be allowed anymore,” he added.

While the department of telecom (DoT) has done good work that includes the policy ambition for not considering revenue maximization as a goal.

“It is time to make policy goals actionable,” Sunil K Gupta, secretary, Telecom Regulatory Authority of India (TRAI) said.

Gupta further said that any policy that was developed two decades ago, can’t be correct in today’s parlance, and added that it was time to think afresh.

Fiberisation is important for 5G, according to him, and he added that every stakeholder should be accountable to provide infrastructure as GDP growth depends on collaborative efforts.

“Telcos are already investing into networks. The national policy talks of pricing rationalization and 33 percent of the revenue go into taxes while in other markets such as in Australia, Europe and China, smaller spectrum usage charge is applied,” P Balaji, chief regulatory officer at Vodafone Idea Limited (VIL) said.

Balaji said that it was evident that the government has put on a framework to enable $1 trillion economies.

“There is a need to simplify taxation regime. Infrastructure sharing is important for 5G. Revenue is not growing worldwide. Telcos spend 15-20 percent on capital expenditure. It is desirable to have a policy on infrastructure,” GSMA India policy director Manoj Misra said.

The London-based group said that SUC should be an administrative cost and not revenue opportunity for the government.

When 5G comes, infrastructure will be decentralized. It could be a service revenue that may fund investments in future,” Rajen Vagadia, president, Qualcomm India & SAARC said.―Telecom Live

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