India Telecom Budget does not address critical issues of industry: COAI

Telecom Lead India: The Cellular Operators Association of India (COAI), the
largest industry body for telecom operators, equipment manufacturers and
infrastructure facilitators in the country, has expressed disappointment on the
Union Budget 2012-13 as announced by the Finance Minister Pranab Mukherjee. The
budget announced does not address critical issues related to the telecom as
well as infrastructure sectors of the country.


On a positive note,
infrastructure funding, including that for cellular towers, optical fiber cables
(OFC) and cables have been provisioned to work through Gap funding which seems
positive as it is expected to bring down the operating capex considerably.


The provision of mobile tracking
for fertilizer subsidy also looks to be favorable. But apart from that, there
are no major takeaways for the industry.


Contrary to the recommendations
put forth by the industry, no tax relief/benefits have been granted to the
telecom industry which keeps reeling under rising operating costs and
deteriorating margins. Moreover, the increase in service tax from 10 percent to
12 percent will further affect the growth of the industry as it is detrimental
to the objectives of rural penetration and affordable rates for the consumers.
The increased costs will eventually be borne by the consumers in the form of
higher charges for the services.


It is very disheartening that
there are still no provisions to support the industry which has been
acknowledged as a vital contributor to the nation’s economic health.


While we are happy that
industries like agriculture have received adequate support, the telecom sector
has again been deprived of the much required provisions that would motivate the
industry to grow,” said Rajan S Mathews, director general, COAI.


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