Voda Idea chief bats for lower levies | The Financial Express

Voda Idea chief bats for lower levies

Moondra’s statement assumes significance because Vodafone Idea is the only operator which has still not given a definite timeline with regard to the launch of its 5G services.

Voda Idea chief bats for lower levies
The company has some hopes on the levies issue, as on Sunday, communications minister Ashwini Vaishnaw said a second set of reforms for the telecom sector will come after the finalisation and passage of the new Telecom Bill. (IE)

By Jatin Grover

Vodafone Idea, which is going through troubled times financially, has again raised the issue of high levies on the telecom sector, which constrains its capacity to invest in networks as tariffs are low.

Speaking at the ongoing India Mobile Congress, the company’s CEO, Akshaya Moondra, said 58% of the overall industry revenue goes to the government in the form of levies. Operators pay around 12% as licence fee and spectrum usage charge, and GST of 18% is applicable on the sector. He said the cost of acquiring spectrum, if converted to an annuity value and calculated as a percentage of revenue, comes to 28%, which takes the total levies to as high as 58%.

Moondra’s statement assumes significance because Vodafone Idea is the only operator which has still not given a definite timeline with regard to the launch of its 5G services. Kumar Mangalam Birla, chairman of Aditya Birla Group, which holds a 27.66% stake in Vodafone Idea, had only said on October 1 that the company will soon begin the “5G rollout journey”.

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“We will leverage our strong presence in rural India, our enterprise customers, our tech partners, and global experience of Vodafone Group for progressively rolling out our 5G network and services in the coming period,” Birla had said.Analysts have expressed doubts about the company’s ability to launch 5G services on a scale matching those of competitors Reliance Jio and Bharti Airtel. There are two reasons for this: of the Rs 25,000 crore fundraise exercise, Vodafone Idea has so far been able to raise only close to Rs 5,000 crore; secondly, Indus Towers, to which it owes around Rs 7,000 crore, has asked it to clear the dues by November or lose access to the towers.

The company has some hopes on the levies issue, as on Sunday, communications minister Ashwini Vaishnaw said a second set of reforms for the telecom sector will come after the finalisation and passage of the new Telecom Bill. These will include rationalisation of levies and restructuring of the licensing regime.“Our next set of reforms will happen immediately after the Telecom Bill is enacted. We will be significantly simplifying the licensing regime,” the minister had said at the India Mobile Congress.

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