Indian Mobile Congress: Telcos Cite High Tax & Burden of IUC Cuts
Seeking immediate relief for the stressed telecom sector, older operators – Airtel and Idea Cellular – slammed high levies, increase in spectrum cost and regulatory norms on Wednesday.
"Taxation on industry is very high. It is in the range of 29-32 percent. Spectrum cost is one of the highest and tariff being one of the lowest. Investment by Bharti Airtel in the last 2 years has been more than that of the past 20 years put together”, said Gopal Vittal, MD and CEO, Airtel India.
He put the debt of the industry at about Rs 4,50,000 crore and return on capital at about 1 percent and "all of this is a problem to acknowledge".
This, Vittal stressed, needs to change if the Digital India dream is to be achieved. He also highlighted issues concerning laying fibre and the policy of mergers and acquisitions.
He acknowledged that the government is involved in easing norms for doing business, but maintained that the industry is facing problems on various fronts.
Idea Cellular MD and CEO Himanshu Kapania said recent market developments have drastically altered industry dynamics, resulting in the sector passing through a phase of severe "financial and mental stress".
The reduction in call connect charges – the IUC rates – will further "deplete" the industry of investible funds, he pointed out.
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