Amit Sharma, EVP and President, Asia – American Tower Corporation on Monday listed out his expectations from the upcoming Budget 2017 for the telecom sector. Stating that 2016 was power packed with significant developments such as 4G rollouts across the nation which jump started the data growth in the country, Sharma said that meeting the rapidly growing demand for 4G data will require Carriers to continue to upgrade networks in 2017-18 and in turn this will need significant rollout of new and infill sites. These are his three expectations from the upcoming Budget:
1) Relaxation of ‘refinancing’ and ‘end use’ of External Commercial Borrowing (ECB): Telecom Infrastructure sector be allowed to refinance the existing ECB loans meeting loan conditions. Further the ‘end use’ of ECB should also be relaxed to include brownfield investments and acquisitions. The sector should also be made eligible for issuing Tax Free Bonds and access to long term low cost debt from Infrastructure Debt Funds (IDFs).
2) Inclusion of telecom infrastructure service providers within the meaning of the term ‘industrial undertaking’ for the purposes of section 72A of Income Tax Act: To allow accumulated losses and unabsorbed depreciation in the hands of the Telecom Infrastructure companies similar to the benefit granted in 2002 to Telecom Service Providers.
3) Increase in tax depreciation rate from 15 per cent to 65 per cent on batteries for industrial or commercial use (used as power back up for telecom towers) to ensure cost recovery within three years’ economic life of the batteries
“Unprecedented increase in adoption of digital services like payments, e-governance and entertainment will necessitate further investments in the telecom infrastructure sector,” he said. He further added that, “without infrastructure status benefits like tax / financing benefits, the industry will not be able to afford these long payback investments.”
Narendra Modi government will be presenting Budget 2017 on February 1. Most analysts and economists are expecting Budget 2017 to be tax-payer friendly, especially given the pain that common man has faced after old Rs 500 and Rs 1000 notes ceased to be legal tender money.