Tax sops may top the agenda at telecom meet

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Telcos are expected to seek immediate cuts in levies and rationalisation of taxes when they meet an inter-ministerial group (IMG) that’s been set up to look into their financial woes from June 12 to 17.

telecom meet, tax, debt, Airtel, Vodafone, Reliance Jio, India

The panel will start by meeting the more stressed companies such as Reliance Communications, MTS, Aircel and Tata Teleservices.

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The group constituted by the cabinet secretary last month will meet representatives of Bharti Airtel, Vodafone and Idea Cellular on June 15, along with those from Reliance Jio Infocomm. Meetings with state-run telcos BSNL and MTNL will be held on June 17.

India’s telecom industry is saddled with a debt of almost Rs 8 lakh crore, including loans from Indian banks, overseas borrowings and dues for spectrum bought in auctions over the past few years.

The telecom IMG has four members from the Department of Telecommunications and one each from the departments of economic affairs, revenue and finance. The group will submit its recommendations to the government in three months.

The carriers did not offer any immediate comment on the upcoming meetings. Reliance Communications, which got a breather of seven months from lenders after delaying servicing of Rs 450 billion in debt, said over the weekend that an intense tariff war and high taxes are expected to squeeze Indian telecom operators, leaving a Rs 1200 billion deficit between the industry’s earnings and its debt or payment commitments this year.

Bharti Airtel and Vodafone India have sought a cut in adjusted gross revenue or the licence fee based on this revenue to 5 percent from the present 8 percent, while Idea Cellular has sought a flat spectrum usage charge of 3 percent against the existing level of 4.8 percent, said people aware of the informal meetings. Telcos also want contributions to the Universal Service Obligation Fund to be scrapped as the money is not being utilised.

By Baishakhi Dutta

 

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