Telecom industry budget recommendations from PHD Chamber

PHD Chamber of Commerce & Industry has submitted its budget recommendations for the Indian telecom industry.


Currently the telecom industry is going through a bad patch with low tariffs, AGR issues and lack of credit from bankers. The industry is doing capex only, if long term credit is available from vendors. Foreign vendors are able to provide their Countries export line of credit without sovereign guarantee to Indian telcos. Therefore, even if our prices and equipments are good to buy, we are not able to supply to Indian TSPs, as they are always short of funds for procurement. Initially we request a 10,000 crores INR domestic line of credit facility.


Lines of Credit extended by Govt. of India should ask for the inclusion of at least 75 percent PMI & PMA compliant Indian goods. If the ownership of the project is in private hands, the Exim Bank of India should have first charge on the assets of the exported project but should not insist on sovereign guarantees from the recipient countries.


We request that while declaring PMI Compliant domestic sales as deemed exports, customs on imports should be increased to the highest possible slab. We also know that 4G/5G Equipments were nowhere in picture when ITA -1 was proposed and USA and China clearly do not adhere to ITA agreements for new technologies. Therefore, ITA I should not be a bottleneck while deciding custom duties on 4G/5G telecom equipment.


Sabka Vishwas Scheme is for settling pending disputes of service tax and central excise. Scheme waives up to 70 percent of tax dues and 100 percent of interest and penalty. This may be partially or wholly extended to the AGR related dues. In return, the telcos could be asked to buy only PMI complaint electronics in All the network used by them (even if the services are outsourced to other vendors) to the extent of at least 75 percent of the value of the Telecom equipment being used in their network.


The 5G auctions should be taken up after 3 years from now so that the Govt gets proper valuations of 5G spectrum. If 5G spectrum is auctioned now, the license fees would be frozen for the next 20 years and the Govt will lose money, also the operators will also lose since they can fully use the bandwidth only after 3-5 years. Please appreciate the real 5G standards would be available by Release 17, for which no date has yet been announced. The current standards are known a Release 15, which is only for trial and demonstration purposes. The commercial deployment would be based on Release 16, which is yetto be announced. Release 15 and 16 are for Non standalone basis and will use 4G core with enhanced features. Many new users apart from Telcos may wish to buy 5G waves once the technologies are firmed up.


As per the National Infrastructure Pipeline plan by the Finance Minister Nirmala Sitharaman, the share of investment in Digital India (Telecom) is approx. Rs. 3.2 lakh crore, out of which the approximate funding by State and Central Government is about 78 percent viz. Rs 2.5 lakh crore. We request that provisions be made in the budget to ensure that wherever Central, Quasi or State Government funds are used, preference to Make in India (PMI policy) and Preferential Market Access (PMA policy) of Department of Telecom, may be implemented in the right earnest to get the maximum impact of this expenditure on GDP growth and GST generation.


At 20 percent of Government expenditure, MSME’s should get business worth Rs 50,000 crore, as per the Government of India Policy. FM should put in conditions and this may be checked and ensured.


India is investing in 4G and going for a 5G push. We request FM to come out with the solutions to ensure that we “Buy Technology and Not Products”. This shall ensure that low foreign exchange outgo and increase in domestic capabilities for high-tech products. C-DOT can be used to hold the technology which could be licenced to at least two or three Indian manufacturers who would then meet the PMI and PMA condition. India, in next 10 years, can save $500 billion in foreign exchange, only in the telecom sector, if we shift from products import to technology imports.


We request the Govt. to have a common duct policy under all its investments in National Infrastructure Pipeline (NIP) so that roads and infrastructure is not dug up every time water, air, power or optical fibre cable are laid. Thus, every infrastructure project should be asked to lay a common duct for all service and utilities with road crossovers at regular intervals.


India Govt. should fix the charges for the right of way (RoW) and require all central, states, municipal and other authorities to provide FTTH broadband connections to all households in as per a fix-time schedule. All new buildings should be asked to take a broadband connection like water & electricity connections before declaring them fit for occupation.


India should immediately put up a FAB for making silicon chips in ITI or any suitable PSU under the Government of India. Government in future should insist for use of domestically manufactured silicon chips in all bulk and/or critical electronics such as 4G and 5G phones, Telecom Core Network equipment, Defence electronics etc.


Private industry should also be utilized in this by farming out the non-core work to Indian companies, since India has good experience in software development and designing of silicon chips.


India Government has offered a package for revival to BSNL. We request the FM to make available the desired funds in time so that asset creation in BSNL and its benefits happens ASAP.


We request the FM to make available funds and instruct various government departments to ensure payments to MSME within 15 days and to all vendors within maximum of 45 days from the date of supply of material. This will boost the business and thereby boost the GDP growth with the resultant increase in GST collection for the Government of India.


Many companies including MSMEs have gone into losses and declared NPA by banks due to delayed payments by Government Departments and PSUs. We request the FM should look into the payment of interest as per the provisions of MSME Act 2006 for the delayed payments to MSMEs, especially in the telecom sector.