Debt burden mounting on telecom operators: Study

The telecom operators are grappling with a huge debt burden of Rs 3.80 lakh crore, reinforcing a case for rationalisation of taxes and other levies, along with high spectrum charges, says a study.

The telecom operators have an accumulated debt of around Rs 3.8 lakh crore and an additional customs duty of 10 per cent will lead to an increase in cumulative duty to 29.44 per cent, according to the Assocham-KPMG study, released here on Wednesday.

"Even though consumers are having the last laugh with competitive offers from the major players, the service providers need to penetrate further into the fast expanding data market and create a volume that will keep their cash flow running," said Assocham Secretary-General D S Rawat.

Simplification and rationalisation of tax regime will provide the required financial stability to the Indian telecom industry, said the Assocham-KPMG joint study, adding that spectrum usage charges (SUC) in India are comparatively higher than other economies.

The telecom sector is expected to contribute 8.2 per cent or Rs 14 lakh crore to the gross domestic product (GDP) by 2020, the study said.

The telecommunication industry is committed to realising the government's vision of Digital India, and a quick resolution of issues to facilitate ease of doing business would accelerate the same, the study pointed out.

"We are confident that the government, which has set a fast pace of policy and execution, will support this endeavour," said P. Balaji, Chairman, Assocham National Council on Telecommunications and Director-Regulatory, External Affairs & CSR, Vodafone India.

--IANS

ag/nir/bg