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Telecom sector bat for lower financial charges: ASSOCHAM-KPMG study

Capital Market 

The financial stress on the telecom sector can be reduced to a great extent by considering a reduction in spectrum usage charges as well as license fees, according to an ASSOCHAM-KPMG joint study.

The high reserve price of spectrum may need to be revisited in light of the financial stress which industry faces in the current scenario. The may consider uniformity in import duties on Lithium-ion batteries across industries to facilitate affordability of green sites. All associated benefits as part of infrastructure status may be extended to telecom infrastructure companies, reveals the ASSOCHAM-KPMG joint study.

The central can consider coming up with guidelines to ensure property tax is levied at uniform rates and is consistent across various state and regional authorities. Authorities may consider extending GST benefits to IP-1s (IP-1 Infrastructure Provider) for procurement of telecom towers as well as subsidisation of diesel cost since it forms a part of operational costs for infrastructure providers.

The may explore the possibility of lowering duty on imports of critical equipment and also evaluate lessening the restrictions imposed on the import of second hand equipment.

Till the time the basic customs duty (BCD) is removed, BCD exemption should be given to OEMs for supply to DTA, which manufacture in SEZ based in India to help keep capex in check.

Skill development programmes may be created with a focus on creating skilled manpower as well as re-skilling of existing manpower in order to be ready for emerging technologies. As per the Indian Telegraph Right of Way rules, IP-1s have not been included under the purview of the same. Inclusion of IP-1s under the same will help increase efficiencies in laying down infrastructure across the country. There is a need for defining a security framework around telecom infrastructure allowing it to be treated as essential infrastructure and stringent penal provisions need to be in place to mitigate risk of damage to these assets.

The industry is of the view that the may increase the MEIS incentive and introduce new incentives to attract more players in the market and to encourage the existing players to ramp up manufacturing Implementation targets of e-waste collection need to be reviewed, as against the current requirement, to ensure compliance across the industry. recommends reconsideration of TEC testing of telecom equipment in favor of an SDoC (Supplier Declaration of Conformity (SDoC) regime.

The may consider making E and V bands available in order to provide better last mile connectivity to subscribers. In order to reduce the burden on infrastructure providers, industry recommend classification of common telecom/ digital infrastructure under a common umbrella and be allowed to be shared amongst licensed TSPs under existing registration certificates.

Approval process for handsets should be streamlined to ensure competitive advantage does not get lost for handset manufacturers while launching new products. The Preferential Market Access (PMA) policy may be revised to ensure level playing field for local and global telecom equipment manufacturers.

Uniform and seamless implementation of Right of Way Rules 2016, across central, state governments and local municipal bodies will help ease deployment of overground and underground infrastructure and provide a level-playing field for telecom infrastructure provisioning. These recommendations, if considered for implementation would help industry in coping with the financial burden currently faced, helping improve business performance as well as prepare for the next wave of growth in terms of new technologies such as IoT, M2M, 5G etc. and continue in the path of connecting the country and helping the achieve the digital dream and inclusive development.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, August 22 2017. 10:16 IST
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