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Ease of business: Streamlining sector dynamics to safeguard operator interests

September 28, 2018

Ease of business: Streamlining sector dy...

By Rajan S. Mathews, Director General, Cellular Operators Association of India

 

The World Bank-published “ease of doing business” index is an aggregate figure, which includes various parameters that define the ease of doing business in a country. From a below average ranking last year, India managed to climb a whopping 30 spots this year, the highest amongst all other listed countries, to secure the hundredth place out of the 190 surveyed countries. Of the 10 considered parameters for the ranking, India improved in eight and this is an important achievement, considering that investor perception is crucial to attract investments.

Although India achieved notable rankings in parameters such as ease of paying taxes, protecting minority investors, availability of credit, electricity connection and high standards in corporate law and securities regulations, there is still scope for improvement in starting new businesses and enforcing contracts.

To achieve the dream of becoming one of the top 50 countries in worldwide rankings, India needs to inculcate fundamental changes across sectors, with the telecom sector being at the top of the priority list.

Ease of doing business in the telecom sector has been a veritable subject of debate for quite some time now. One of the strategies outlined in the draft National Digital Communications Policy (NDCP), 2018 is to simplify and facilitate compliance obligations, which will be an important step towards ease of doing business in the sector. This is very important in order to achieve the NDCP goal of attracting investments of $100 billion by 2022.

There are many issues that make the businesses of telecom operators cumbersome and put unnecessary financial burden on them. One such issue is calculating the adjusted gross revenue for the purpose of licence fee and payment of spectrum usage charges (SUCs). This has been a major issue for more than a decade and has been a bone of contention between the operators and the Department of Telecommunications (DoT). Also, the process for verifying deduction claims is extremely complex, and leads to disputes and litigations. In order to streamline the process, DoT should both simplify the definition of AGR, and automate the licence fee/SUC payment and verification process. It should also adopt an approach similar to the TDS Traces adopted by the Income Tax Department.

Similarly, the current SACFA application and clearance procedures are causing significant delays in the issuance of SACFA clearance for telecom sites. This hampers the timely operationalisation of the telecom network. We are happy that DoT has initiated action in this regard; however, the same needs to be expedited.

There are other issues wherein operators need the government to simplify the licensing provisions. For example, under the existing regime, import licences are provided on a circle-wise basis and once imported, it is mandatory for the telecom service providers (TSPs) to use that equipment only in that circle. In a dynamic scenario like today, this restricts TSPs from moving their equipment from one state to another. There are various reasons due to which there may be a need to shift the equipment from one circle to another including increase in the roll-out in a circle or lesser usage of equipment in a particular circle due to business needs. In such scenarios, free movement of equipment should be allowed from one circle to another.

The sectoral regulator, the Telecom Regulatory Authority of India (TRAI) also gave its recommendations on the ease of doing telecom business to DoT on November 30, 2017, which have been approved by the Telecom Commission. These recommendations should be immediately implemented as the same will also be in line with the objectives of the NDCP, 2018.

It is also important that the progress towards ease of doing business should be monitored by DoT or any committee in order to ensure the timely completion of the steps required to be taken in this regard.

Another major hurdle for the operators in rolling out their services is issues related to right of way. While the central government has framed the rules, the same are not being implemented at the local level for network roll-out as the municipal bodies do not cooperate with the TSPs.

Ease of doing business can only be achieved through a policy alignment between the centre and the states. The regulatory regime must consider fundamental policies and draw roadmaps based on current sectoral dynamics. What is imperative is the simplification of policies and setting them against clear timelines. Proper processes will go a long way in saving resources and paperwork. As a corollary, this in turn, will lead to faster clearances, operational transparency, and cost savings, and provide a push to the government’s digitalisation initiative. Collectively, it will offset the sector’s debt and relieve it from financial distress.

It is imperative for the sector and the government to work in unison towards building a digitally empowered, business-conducive and investor-friendly nation.

 
 

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