Budget 2018: No cut in telecom levies, stressed sector remains orphan, says COAI

Budget 2018: Telecom operators body COAI today expressed anguish at the Union Budget not addressing the industry’s key demands, such as cut in levies and taxes, and said the sector which is in deep financial stress “continues to remain an orphan”.

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Budget 2018: Telecom operators body COAI today expressed anguish at the Union Budget for not addressing the industry's key demands. (Image: Reuters)

Budget 2018: Telecom operators body COAI today expressed anguish at the Union Budget for not addressing the industry’s key demands, such as cut in levies and taxes, and said the sector which is in deep financial stress “continues to remain an orphan”. “However, for realising the PM’s vision of a fully connected and empowered Digital India, we reiterate that the telecom industry is deeply disappointed that none of our key asks have found mention in the FM’s budget,” Rajan Mathews, the Director General of Cellular Operators’ Association of India (COAI), said. In a statement, Mathews said that the industry is “saddened” to see that telecom, a bedrock for pushing Digital economy forward, “continues to remain an orphan”. The association said the industry has been seeking a cut in levies and taxes, and that an urgent intervention was critical for “resuscitating” the sector which is currently experiencing its worst financial health and hyper competition.

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The comments come against the backdrop of financial difficulties being faced by the industry, whose revenue and profitability have come under pressure in the wake of intense competition in the market. The entry of aggressive new operator, Reliance Jio, and its free voice and dirt-cheap data offerings has prompted incumbent telcos like Bharti Airtel, Vodafone and Idea Cellular to respond, hitting their overall financials and business metrics.

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The industry is saddled with nearly Rs 4.5 lakh crore of debt, and taking stock of the financial woes of the sector, the Telecom Commission recently approved a proposal for giving relief to the industry by allowing operators more time to pay for the spectrum they bought in auctions. The relief package for telecom operators is expected to be placed before the Union Cabinet shortly. Earlier this week, the Economic Survey 2017-18 had acknowledged that the sector is going through stress due to a huge debt pile, tariff war and irrational spectrum costs and had called for policy measures to minimise over-bidding of assets during auctions.

COAI lauded the doubling of allocation of Digital India and also welcomed government’s decision to set up 5 lakh WiFi hotspots. “We are also enthused to see that Niti Aayog, will now be spearheading a national program to direct efforts in Artificial Intelligence, Quantum Computing, Blockchain, Robotics, and Digital as a way of life,” Mathews added.

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