Cellular Operators’ Association of India wants the next government to address the issues affecting the financial health of the sector. As part of the its 100-day proposal for the new government the industry wants implementation of the National Digital Communications Policy 2018, fixing the Right of Way (RoW) for laying optical fibre, pricing of the 5G spectrum beside other issues.
“There is customer demand for 5G spectrum and therefore the government should look at the right pricing and quantum of the spectrum which essentially means large-size contiguous spectrum,” COAI Director General Rajan Mathews told Business Standard.
Mathews said that the rollout of the 5G spectrum in the absence of contiguous spectrum would not be possible.
He said that fibre is a major requirement for the penetration of 5G spectrum and therefore the government should ensure a dedicated RoW for seamless laying of the fibre network. “The states are non-committal on the subject while the Centre has allowed the same. The co-ordination between the two is what we require.”
National Digital Communications Policy 2018 was approved by the Cabinet in September last year aims to attract $100 billion investment and create 4 million jobs in the sector by 2022.
It also proposes to rationalise levies such as spectrum charges to rejuvenate debt-ridden telecom sector. The proposed new telecom policy seeks to provide broadband access to all with 50 megabit per second speed 5G services.
He said that revenue continues to remain under pressure for the industry saddled with high debt, and for most players the earnings before interest, tax, depreciation and amortization or EBITDA generated was not sufficient to meet the interest expenses.
COAI time and again has said that income from interest, dividend and capital gains from sale of fixed assets, gains from forex fluctuation, income from rent, insurance claims, and distributors margin should not be included in the revenue of the telecom operators for the purpose of computation of licence fee and spectrum usage charges.
Some of the major demands of the industry include reforms in AGR finalisation, allowing deductions of lease line/bandwidth charges and the charges paid by one telecom operator to another as 'pass through charges', alignment of the bank guarantees with the licence fee and SUC payouts of telecom operators, and refund of accumulated unutilised input tax credit, among others.
Under the Unified License Agreement, the licence fee currently is 8 per cent of the AGR. Further, in case the operator obtains spectrum, they also pay spectrum related charges, including payment for allotment and use of such radio waves.