The issue of diesel subsidies provided to tower companies continues.
Prior to this, the Telecom Equipment Manufacturer?s Association (TEMA) of India had written to the Prime Minister Dr Manmohan Singh highlighting huge consumption of diesel by telecom tower sites resulting in huge subsidy burden.
This was met with a strong reaction from the Cellular Operators Association of India, the Association of Unified Telecom Service Providers of India and the Towers and Infrastructure Providers’ Association, who then issued a joint press release in this context.
Now, TEMA has written to Dr Manmohan Singh once again on this subject. The industry body has suggested strong regulatory guidelines to enforce the withdrawal of diesel subsidy to telecom service providers or alternately introduce an appropriate one-time tax per tower on the telecom service providers and telecom tower companies.
Referring to a report released by the Telecom Regulatory Authority of India?s (TRAI), TEMA has communicated that the total number of telecom towers in the country by the end of 2010 were around 400,000, consuming on an average power of around 3-4 kW per tower site, of which about 60 per cent is from off-grid sources.
Ashok K. Aggarwal, Honory Director General, TEMA said in the communication, ?Currently this number has already gone up and we have about 500,000 telecom towers dotted across the map of India. Going by reports, India will have about 300,000 more telecom towers in the next five year or so. This would mean that in a country which is already power deficient will have to feed about 800,000 telecom towers and the dependency on off-grid source mostly operating on diesel based generator sets will increase many-fold. This would mean more subsidy support for the telecom service providers.?
The letter added that TRAI?s recommendations on Green Telecommunications released last year indicated that approximately 8,760 litres of diesel was being consumed annually by each telecom tower site, which works out to around 4.3 billion litres per annum of diesel consumption by the 500,000 telecom towers alone.
So, with an average diesel subsidy of about Rs 10 per litre, each year the government of India is subsidising Rs 43.80 billion to already well off telecom service providers and telecom tower companies. ?The subsidy which is actually meant of the rural poor, farmers and bulk transport systems is being mis-utilised. Our submission to the government of India is to stop subsidising the telecom service operators and telecom tower companies and instead introduce appropriate onetime tax per site. This will create another source of much need finances for the exchequer and will also ensure that the telecom service operators and telecom tower companies start adopting power efficient infrastructure operating on greener source of energy much faster,? added Aggarwal.
The letter further stated that as per industry estimates, with the evolution of services and for the expansion of the telecom networks to unconnected rural and other areas, the country is expected to add another 300,000 towers in next five years. Unless there are strong regulatory guidelines to enforce the withdrawal of diesel subsidy or introduction of an appropriate onetime tax, the existing trends otherwise will result in further consumption of diesel to almost 5 billion litres in the next five years timeframe and will also result in an alarming increase in CO2 emissions.
In conclusion, Aggarwal said that the government should levy a per site onetime tax on all the sites owned by the mobile operators equivalent to 12 years of subsidy to offset, fully or partially, the loss to the exchequer on account of subsidy. This will give the government revenue to the tune of Rs. 500 billion, which is urgently required.
