Financial stress in telecom sector can be relieved by reducing SUC: Assocham

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According to a joint study by Assocham and KPMG, the financial stress that the telecom sector is currently facing can be relieved to a certain extent by reducing the spectrum usage charges (SUC) as well as the license fees.

Financial stress in telecom sector can be relieved by reducing SUC

The study says that the high reserve price of the spectrum may need to be revisited in light of the financial stress which industry faces in the current scenario. The government may consider uniformity in import duties on Lithium-ion batteries across industries to facilitate affordability of green sites. All associated benefits as part of infrastructure status may be extended to telecom infrastructure companies.

The government may explore the possibility of lowering duty on imports of critical equipment and also evaluate lessening the restrictions imposed on the import of second-hand equipment. Until the time the basic customs duty (BCD) is removed, BCD exemption should be given to OEMs for supply to DTA, which manufactures in SEZ based in India to help keep CapEx in check," revealed the ASSOCHAM-KPMG joint study.

The study pointed out that, the government could also come up with certain guidelines to ensure that the property tax is levied at a uniform rate and, moreover, remains consistent across different states and its regional authorities. The study also suggested that the government should consider extending the current GST benefits to IP-1s (IP-1 Infrastructure Provider) as a means to acquire more telecom towers.

"Skill development programs may be created with a focus on creating skilled manpower as well as re-skilling of existing manpower in order to be ready for emerging technologies. As per the Indian Telegraph Right of Way rules, IP-1s have not been included under the purview of the same. The inclusion of IP-1s under the same will help increase efficiencies in laying down infrastructure across the country," the study noted.

There is a need for defining a security framework around telecom infrastructure allowing it to be treated as essential infrastructure and stringent penal provisions need to be in place to mitigate the risk of damage to these assets, a study noted further.

The approval process for handsets should be streamlined accordingly to ensure competitive advantage does not get lost for device makers while launching their new products. The ASSOCHAM-KPMG joint study states that these recommendations, if implemented, will help the industry to cope with the current financial crisis and also prepare the telcos for the next wave of growth in IoT, M2M, 5G, and more.

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