Telecom Lead India: The much anticipated Union
Budget 2012-13 is out. But telecom industry in India is not happy. MTS India
President and CEO Vsevolod Rozanov said increase in service tax from 10 percent
to 12 percent would increase cost of ownership of a mobile phone. This becomes
all the more significant for CDMA based mobile services which to a large extent
services the telecom needs of customers who are at the bottom of the pyramid.
While many systemic elements have been set right in the
2012-13 Union budget, however the telecom industry continues to face numerous
challenges,” Rozanov added.
From a global perspective, the telecom industry
in India continues to attract the highest tax rate of 23 percent.
Looking in AGR terms, the telecom industry generates revenues of approx. Rs
122,000 crore, out of which Rs 28,000 crore is the approx. outflow to the
exchequer, according to Rozanov.
It would have been good, if this could have been
rationalized. 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, specially
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, it would have been good, if this growth path would have got
some support through easing of taxes on internet and broadband services.
Given this overall context, if the Indian telecom
industry is declared as an infrastructure industry that too would immensely
benefit the entire ecosystem.
MTS India CEO seeks zero service tax on broadband service to
grow in Indian telecom market
Recently, MTS India CEO said there is a need to support
growth path. Levy of zero service tax on Internet and broadband service would
certainly act as a catalyst in this process.