Telecom Budget does not have anything specific for sector: Airtel chairman Sunil Mittal

Telecom Lead India: Bharti Airtel chairman Sunil
Bharti Mittal said the Union Budget 2012-13 does not contain anything specific
for the telecom sector, which is awaiting the new National Telecom Policy (NTP)
scheduled to be announced in June.


The government announced the disappointing budget at a time when the telecom industry is set to report 85 percent decrease in net profit in


Indian telecom operators profit to decline 85% in 2011-12

Profit after tax of Indian telecom services segment is
expected to decline 85 percent in 2011-12, according to India Government’s
Economic Survey. The report said the significant decrease in profit is mainly
on account of the sharp rise in the industry’s interest outgo and higher
depreciation charges due to the heavy borrowings for acquiring 3G licences and
rolling out 3G services.


According to the Budget, bills for mobile phones are
expected to rise following a two percent hike in service tax.  Service tax goes up from 10 to 12 percent and obviously that will
be passed on to the customers. On an overall basis, there is nothing that
changes the fortunes of the telecom company.  

The new NTP is expected to do away with roaming charges and implement one
nation full mobile number portability (MNP), besides providing telecom the
status of an infrastructure sector, which will help ease credit flows to
companies for funding rollout plans or expansion activities, according to a
report in IANS. 
Finance Minister Pranab Mukherjee Friday proposed to raise the service tax to
12 percent from the existing 10 percent while presenting the budget for
2012-13, adding that a few essential services such as education will be
exempted from the service tax. 
The telecom sector was already being heavily taxed on an overall consumption
perspective. About 30 percent of what customers pays to a telecom company goes
in some sort of taxation or the other and I am not talking about indirect
taxation which is income tax.


Bharti Airtel Q3 2011-12 income up 17% to Rs 18,477 crore

Higher tax provisions had impacted Airtel’s net income to
nosedive by 22 percent to Rs 1,011 crore in Q3 2011-12 from Rs 1,303 crore in
the corresponding quarter previous fiscal.