Finance Minister Pranab Mukherjee has presented the Union Budget for 2012-13
While most of the industry expectations and long list of budget wish lists went unanswered, there were few key take away points in the budget document.
The move to exempt mobile phone parts and memory cards from basic custom duties is likely to bring down the manufacturing cost of the handsets. This would in turn push the usage of mobile phones in the country.
Another important move is the inclusion of telecom tower infrastructure in the viability gap funding. This will improve the investments in the sector.
However, the mobile bills of subscribers are expected to rise following a twenty percent hike in service tax from 10 per cent to 12 per cent. For operators, this may bring bad news, as the increase in call rate will in effect reduce the usage per user, which in turn would impact impact operator revenues.
An emphasis on rural economy and inclusive growth has also been made. Improving the rural economy will push up rural connectivity which will benefit the telecom players.
Overall, the budget does not pose any severe impact the telecom industry dynamics. However, no reference to broadband could be a disappointment.
