Budget 2015: Extend infrastructure status to telecom sector, says Videocon Telecom

We suggest tax sops and incremental tax benefits for the sector which will help lower the end-consumer cost and enable operators to expand operations. We also seek the government’s intervention to facilitate infrastructure building with reference to towers and equipment enabling network expansion in both width and depth and help realize the government’s vision of greater internet penetration in the country hence attaining the vision of ‘Digital India’.

Today RBI does not consider spectrum as tangible property but they put hefty charges on it. Our recommendation to the Hon’bl Finance Minister will be to do away with this discrepancy, and create norms for RBI to levy justifiable charges on spectrum for the telcos.

Relaxed M&A norms are other recommendations which the industry has from the Finance Minister, when he looks into the future of the industry. We also recommend making available greater airways through spectrum sharing and trading that will help in optimum utilization of this most scarce and sought after resource ‘spectrum’.

For the telecom industry

Firstly, we will recommend to the Hon’bl Finance Minister to extend benefits of ‘Infrastructure Sector’ to the industry. Today, the loan tenure for companies with Infrastructure status is for 25 years whereas loans to the telecom companies are provided by RBI for only a period of 10 years. Infrastructure status industries enjoy long credit period on funding from banks and NBFIs with low rate of interest with interest holidays, while in telecom the same is not being extended.

Despite clear commitment in the NIA for auction that spectrum would be included in TPA to facilitate funding; the same is not done yet. Thus, we believe that the extension of infrastructure status to the industry will help gather greater benefits for the sector.

While benefits of an infrastructure status shall help in creating greater sync in the industry, and ensure larger sectoral investments which is one of the major requisites of the sector, yet the missing link is reduction in import duties on import of equipment and devices and excise duty on indigenous supply for telecom, which should be looked into a focused manner.

--Arvind Bali, Director and CEO, Videocon Telecom