GSM Association wants tax cuts in new policy

GSM Association wants tax cuts in new policy
NEW DELHI: The GSM Association, which represents the interests of carriers globally, expects India’s Department of Telecommunications (DoT) to reduce the multiple taxes and levies including the Universal Service Obligation (USO) charge in its new telecom policy, besides rolling out a spectrum sale roadmap.
Emanuela Lecchi, head of public policy, APAC at GSMA told ET that India’s new national telecom policy, expected by March 2018, is a step in the right direction and that India could be a role model for many countries. London-based GSMA represents more than 800 service providers worldwide including India’s Bharti Airtel, Vodafone India, Idea Cellular and new entrant Reliance Jio Infocomm.

“The national telecom policy involves several aspects coming together, and the government is taking a step in right direction,” Lecchi said. The new telecom policy is expected to give due consideration to rapid technological advancement. She said GSMA wants DoT to release a spectrum roadmap ahead of next auctions, to make it easier for carriers to chalk out individual strategies for sale of radio waves.

“The industry is facing difficulty in terms of erosion of revenue, and operators will not be able to take out lot of amount for spectrum buyout in the short term,” Lecchi said, adding that it is important to create equal conditions for competition.

The disruptive launch of Reliance Jio Infocomm’s services in September 2016 with freebies mounted massive financial pressure on older telcos and led to rapid consolidation marked by the exits of smaller players such as Telenor, Tata Teleservices and Reliance Communications.

The consolidation has left market leader Bharti Airtel, No. 2 and No. 3 players, Vodafone India and Idea Cellular, which are merging their operations, and Reliance Jio Infocomm as the remaining major private players.

“Consolidation is good for India that will help players to focus on the wider network. Fragmented networks have always been a difficult preposition and that too with such gigantic projects such as Digital India,” Lecchi said.

The other major issues vexing the industry, she said, include multiplicity of levies including the high USO charge, a kitty used by the government for the development of rural projects, and ad hoc levying of penalties.