The Associated Chambers of Commerce and Industry of India (ASSOCHAM), has approached the new government with a four-pronged strategy paper suggesting roadmap ahead for reviving growth in the telecom sector
The industry body has suggested that the new government can drive growth in the telecom sector by reducing regulatory costs, auctioning available spectrum, extending benefits of infrastructure status and providing an impetus to domestic manufacturing.
T V Ramachandran, chairman, national telecom council, ASSOCHAM has requested the government to auction all the available spectrum lying idle with it on a priority basis. The industry body has stated that the government should take steps to auction available spectrum in the 700 MHz, 800 MHz, 900 MHz, 1800 MHz and 2100 MHz bands.
According to the industry body, there is also the need to immediately reduce regulatory costs for telecom operators and bring down adjusted gross revenue(AGR) based levies by about one per cent annually during the course of next five years while simultaneously ensuring that such a step does not have a negative impact on the revenues earned by the government. The strategy paper released by ASSOCHAM also underlines that operators pay as much as 15 per cent of their AGRs as licence fee along with other related charges towards sector specific levies and various central and state taxes borne by service providers. The current AGR definition needs to be reviewed and the government should approach the Telecom Regulatory Authority of India (TRAI) for its views on the definition and scope of AGR.
Further, ASSOCHAM has suggested that the new government urgently implement TRAI?s guidelines on trading and sharing of spectrum, besides a clear roadmap should also be laid down for future release of spectrum to provide clarity to the operators. It has also urged the new government to fully extend the benefits of infrastructure status already granted to the telecom sector two years ago to enhance its competitiveness.
Further, the industry body has pointed out that a uniform low-cost right-of-way charge for towers and optical fibre is critical for faster rollout of telecom network. Other important suggestions incorporated in the strategy paper include ensuring availability of grid power at industrial rates and preferential/low interest financing and framing of rules under the Telegraph Act for uniform processes for installation and operation of mobile towers across states.
ASSOCHAM is also of the view that there is a need to provide impetus to domestic manufacturing by reviewing and rationalising levies on equipment manufacturing, incentivising exports coupled with favourable policy support. It further states that the refund of excise duty for domestically manufactured mobile handsets, their components, parts and accessories would boost manufacturing and therefore, should also be considered by the government. Moreover, the focus should also be laid on research and development initiatives to promote innovation in telecom sector.
The ASSOCHAM concludes that all these measures can be implemented in a short timeframe of 30-90 days, which will give the right push to the telecom sector and also have a multiplier effect on other sectors.
