Telcos expect govt to take immediate steps to resolve industry woes, AGR definit

Telecom service providers expect the government to take immediate steps to resolve the issues of the sector which has played the role of an enabler for other key industry verticals and supported 30-35% of GDP during the COVID-19 crisis, industry body COAI said.

COAI Director General Lt Gen SP Kochhar told PTI that the telecom sector needs to make huge investment in infrastructure and needs regulatory support, review of the adjusted gross revenue (AGR) definition, GST exemption on AGR dues, promises made in National Digital Communications Policy 2018 for ease of doing business etc.

"Telecom is not a vertical industry in itself; rather it is an enabler of horizontal growth across industries, be it manufacturing, e-commerce, healthcare, education, and so on. Thus, the concerns affecting the telecom industry become the concerns of these industries, and so the issues of telecom need to be addressed as an issue affecting the overall economy of the country, so it should be given priority," Kochhar said.

Also read: COAI says telecom industry financially stressed; seeks govt support

He said that the transformation that was seen in 2020 after the pandemic has further proved how telecom acts as a growth catalyst in a digital society.

"Telecom has enabled 30-35% of the GDP in the COVID-19 lockdown, other than the present 6% direct contribution to the GDP. This is significant considering the fact that overall, 54% of India's GDP comes from the services sector," Kochhar said.

The sector narrowly escaped financial collapse following the apex court upholding the government's method to calculate revenue share with telecom operators. The ruling burdened telecom operators with total dues of around ₹1.47 lakh crore.

"Some of the top challenges faced by our member TSPs today are those related to AGR issues, spectrum pricing, Right of Way (RoW) rules, and cell tower radiation. COAI has been pressing the government and TRAI on these," Kochhar said.

The successful bidders in the upcoming auction of spectrum worth ₹3.92 lakh crore will also need to pay 3% AGR on revenue. The telecom sector has demanded the government to review the definition of AGR to make business sustainable.

The COAI DG said that the government should exempt the levy of GST on licence fees, spectrum usage charges and payment of spectrum acquired in auctions.

Kochhar said that the industry has accumulated unutilized input tax of about ₹35,000 crore. This should be refunded immediately to enhance cash flows of the industry.

"To ensure continuity in service and meet SLA (service level agreement), telecom providers need to prepare their infrastructure. Network congestion, mainly due to dearth of cell towers, has been deeply impacting the services across India. Much investment and regulatory support are needed to address these challenges," Kochhar said.

He said that there is a need for identification of a clear road map for availability of spectrum.

"Spectrum harmonization plans should be put in place by the government in consultation with TSPs (telecom service providers & OEMs (original equipment makers) to support full range of future technologies including M2M and internet of things services," Kochhar said.