No substantial relief visible for telecom sector in Budget: COAI
"From what we have seen so far, there appears to be no substantial relief for the telecom sector. Of course, we are waiting to see the details," Cellular Operators Association of India (COAI) Director General Rajan Mathews told .
Mathews said that telecom not being included in the definition of infrastructure was a disappointment for the industry.
"The FM has talked about smart meters and Artificial Intelligence, and we will see how that translates into benefit for our sector," he said.
The government has more than doubled its revenue estimate from the debt-ridden telecom sector to Rs 1.33 lakh crore in fiscal year 2020-21, mainly on account of levies derived from adjusted gross revenue (AGR).
In the receipt budget, the government has pegged revenue collection at Rs 1,33,027.2 crore for financial year 2020-21 under communications head. Receipts under 'Other Communication Services' mainly relate to the license fees from telecom operators and receipts on account of spectrum usage charges (SUC), the budget document explained.
Mathews said increased receipt estimates appeared to factor in AGR payments, levies like licence fee and spectrum charges, and auction proceeds.
The telecom industry had been pinning its hopes on the Union Budget to offer some breather on licence fee and SUC levies.
COAI had been asking for a reduction in these levies -- licence fee to 3 per cent from 8 per cent at present and SUC to a flat 1 per cent from average of about 5 per cent. At present, the licence fee of 8 per cent includes a USO Fund component of 5 per cent.
As it is, the troubled industry is buckling under Rs 1.47 lakh crore in additional statutory dues in the wake of a recent Supreme Court ruling on AGR. As things stand today, telecom companies owe the government Rs 92,642 crore in unpaid licence fee, and another Rs 55,054 crore in outstanding SUC dues.
According to government data, the liabilities in the case of Bharti Airtel add up to nearly Rs 35,586 crore, of which Rs 21,682 crore is licence fee and another Rs 13,904.01 crore is SUC dues (excluding the dues of Telenor and Tata Teleservices).
For Vodafone Idea, this number stands at a cumulative Rs 53,038 crore, including Rs 24,729 crore of SUC dues and Rs 28,309 crore in licence fee.
The remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies.
The Supreme Court had allowed three months to the affected telecom operators to cough up the amounts due to the government. The deadline expired on January 23, but the Telecom Department did not take any coercive action against defaulters given that their appeals seeking relaxation in payment timeline is currently pending before the top court.
Bharti Airtel, Vodafone Idea Ltd, and Tata Teleservices have jointly filed a modification application in the Supreme Court seeking more time to pay the statutory dues.
The fresh plea for relief on payment schedule came after Supreme Court, last month, dismissed the review petitions filed by telecom companies against the apex court's October 24, 2019 verdict on AGR.Meanwhile, the Department of Telecom is also working on spectrum auction which is likely to be held in April-May 2020. MBI RVK
(This story has not been edited by Business Insider and is auto-generated from a syndicated feed we subscribe to.)