MTS India CEO seeks zero service tax on broadband service to grow in Indian telecom market

Telecom Lead India: Telecom industry is facing severe
pressure due to several government decisions. The forthcoming budget will be
vital for the entire industry to survive in Indian mobile market. Vsevolod
Rozanov, president and CEO MTS India, shares his expectations from 2012-2013 Budget:


Inspite of the numerous challenges being faced by the Indian
telecom industry, the 2012 budget presents yet another opportunity for the
government to set some systemic elements right. From a global perspective, the
telecom industry in India attracts the highest tax of 23 percent.


Looking in AGR terms, the industry generates revenues of
approx. Rs 122,000 crore, out of which Rs 28,000 crore is the approx. outflow
to the exchequer. This needs to be rationalized on a priority. The telecom
industry is clearly getting squeezed on account of such outflows and what makes
the situation all the more difficult is the hesitation of banks to lend money
to operators. All this naturally has a deep impact on the roll out of voice and
data services for the common man, specialy in the rural areas.  


Equally significant is the fact that broadband penetration
in India stands at just 1 percent as against the wireless teledensity
of 74 percent. With the national broadband plan envisaging 160 million
broadband connections including 60 million wireless broadband connections by
the year 2014. There is a need to support this growth path. Levy of zero
service tax on Internet and broadband service would certainly act as a catalyst
in this process.


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