Telcos seek infrastructure status, lower levies for sector

Telcos seek infrastructure status, lower levies for sector New Delhi: Telecom sector is seeking infrastructure status and downward revision of high taxes, industry bodies COAI and AUSPI said in their joint pre-budget recommendations submitted to Finance Ministry Thursday.

"The telecom sector essentially providing public telecommunication services should be viewed as a critical infrastructure industry in order to maximise the GDP growth of the country," the industry bodies said.

At present, telecom does not fall within the purview of the definition of infrastructure projects.

Cellular Operators Association of India (COAI) represents GSM players while Association of Unified Telecom Service Providers of India (AUSPI) represents CDMA players as well as dual technology players.

The bodies said lowering of levies and tax breaks for the sector is a critical tool which will empower the industry to improve tele-density and expand services.

"It is pertinent to mention that the multiple taxes and levies on the industry account for as high as approximately 30 percent of telecom service revenues as compared to just 5 percent for other Asian economies," they said.

The bodies said despite long-term viability of the telecom sector, banks and FIs do not want to take any fresh exposure, cutting down the funding options of the industry drastically due to the growing regulatory uncertainty in the sector.

"It is critical that the industry is provided a dedicated sectorial allocation/fund to ensure consistent financial support for long terms of 15-18 year tenures," they said.

The associations said there is a need to infuse funds by way of redeemable preference shares (RPS), spectrum mortgage etc to bring the necessary capital investment back into the sector.

PTI