Tinkering with MTC will hit rural telecom network: Vodafone

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Tinkering with mobile termination charge (MTC), earned by cellular operators on incoming calls, will paralyze the telecom network in rural India, Vodafone MD and CEO Sunil Sood said. 

Vodafone, MTC, rural, telecom network, India

Sood said at the Cellular Operators Association of India AGM that when they put up a site in village, the profit from that site is completely dependent on incoming calls. The earning of incoming calls depends on mobile termination charge (MTC). Any tweaking in MTC can cause all rural India sites to collapse.

The new telecom operators have favoured abolition of mobile termination charges while incumbents like Bharti Airtel, Vodafone and Idea Cellular have defended it.

He said that now, the sector is paying dual charges by sharing profits through spectrum usage charge and also making upfront payment in auctions. This 5 percent of universal service obligation charges have been imposed on telecom operators to create fund that will invest to build telecom infrastructure in rural area.

He demanded parity under Goods and services tax regime with other sectors. This is because in electronics manufacturing sector excise has been abolished and firms only need to pay consumption tax in form of GST. The tax level on telecom services have been increased to 18 per cent from 15 per cent.

At the annual general meeting, Bharti Airtel Managing Director & Chief Executive Officer (India and South Asia) Gopal Vittal was re-elected as the Chairman. Sood, will continue as the Vice-Chairman of COAI.

By Baishakhi Dutta

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