Telecom sector wants Budget 2022 to help usher in next phase of growth

Burdened under a debt of about Rs 8 lakh crore, the telecom sector was thrown a lifeline in mid-September which included deferring of statutory dues by four years among other relief meaures. Industry revenue is now in recovery mode with telcos having managed to raise prices twice — in December 2019 and 2021 — pushing up average revenue per user (ARPU). But with 4G networks to be expanded, upcoming 5G auctions and the need for top-dollar investments, the sector is looking at the Budget to lend a helping hand in this next phase. Industry wants customs duty exemption on critical telecom equipment that would help service providers lay down more fibre and improve connectivity.

BUDGET RECOMMENDATIONS

1. Reduction in licence fees
2. Customs duty exemption on critical telecom equipment
3. Financial, policy, and regulatory assistance to encourage commercial deployment of 5G networks
4. Better export ecosystem through more trade agreements. India currently accounts for less than 2% of the global electronics production
5. Bring petroleum products under GST – Towers are run on diesel & there is cascading effect of high centre and state taxes
6. Fiscal incentive schemes to drive domestic innovation, indigenous manufacturing & promote technologies like AI

The telecom industry needs investment in robust and reliable communication infrastructure to meet the rising demand for connectivity. There is an urgent need to reduce the burden of levies on the sector, said SP Kochhar, Director General, COAI.

Favourable budget announcements for rural internet penetration through utilisation of USO funds will help the country realise its digital ambitions in the 5G wave, said Peeyush Vaish, Partner and Telecom Sector Leader, Deloitte India.