Budget leaves telecom industry disappointed; TAIPA rues hike in customs duty on optical fibre

The telecom industry was left disappointed as the Budget did not provide much-anticipated relief from high taxes and levies imposed on the sector.

The Tower and Infrastructure Providers Association (TAIPA) Friday said the government's move to raise customs duty on optical fibre cable to 15 per cent from the current 10 per cent will seriously impede the roll-out of 5G in India.

Tilak Raj Dua, Director General of TAIPA, said the budget was "lacklustre" as hike in the basic custom duty would result in higher capital expenditure, eventually "burning a hole in the pockets of the telecom industry which is already facing financial turmoil".

Apex industry body Cellular Operators' Association of India (COAI) said it remains optimistic that the government will provide the much-needed financial relief and impetus to the industry in its post-budget review, given the importance of the sector in driving inclusive growth.

"We laud the government for a progressive and forward-looking budget that has provided the building blocks for a USD 5-trillion economy... But industry needs help, which was not forthcoming in the Budget," Rajan S Mathews, Director General, COAI told PTI.

The telecom industry rued that its plea for support was not properly addressed.

The association, however, lauded the emphasis on domestic manufacturing.

In a statement, COAI said that, in many ways, the budget encompasses the vision of the Prime Minister, particularly in the areas of infrastructure, rural connectivity, women empowerment, housing, power and cooking gas in rural areas, with an emphasis on creating a robust digital economy.

The telecom services industry which has been flagging the high levies like licence fee and spectrum usage charges, had pinned its hopes on the Budget providing the much-needed respite.

"It has been shown categorically that the telecom industry has been a significant engine for GDP growth, rural inclusion, women empowerment and affordable communication services and ubiquitous connectivity," Mathews said in a statement.

As such, the industry hoped the Union Budget would provide relief from the high taxes and fee on the industry," he added.

It is pertinent to mention here that the National Digital Communications Policy - the policy blueprint for the sector - talks of catalysing investments for digital communications sector through review of levies and fees including licence fee, spectrum usage charges, definition of adjusted gross revenue and rationalisation of universal service levy.