Bharti Airtel Chairman Sunil Mittal on Wednesday called for rationalisation of levies on the “very important” telecom sector, which he said, was taxed almost as high as the tobacco industry.
The government, however, said it was ‘alive’ to the pain points highlighted by the industry which would be addressed in the new National Digital Communications Policy-2018.
Mr. Mittal, who was speaking at the India Mobile Congress 2018, shared the dais with Telecom Minister Manoj Sinha as well as heads of two rival operators — Mukesh Ambani (Reliance Industries — which owns Jio) and Kumar Mangalam Birla (Vodafone Idea).
“On one hand it [telecom] is a very important industry which is enabling India to embrace digital medium, and on the other hand this industry remains taxed like the tobacco industry,” Mr. Mittal said.
He pointed out that telecom was a capital intensive sector, requiring “tremendous amount” of investment, and still “spectrum prices and licence fee are very high and the GST at 18%, which is almost in the highest tax bracket.”
During the same session, Vivek Badrinath, Regional CEO, Africa Middle East Asia Pacific, Vodafone Group, pointed out that the Indian telecom sector was under financial stress.
Later, speaking to the media on the sidelines of the event, Balesh Sharma, CEO of the newly formed Vodafone Idea, said currently the whole industry was bleeding. “We are trying to rediscover how to bring costs down… at some stage it has to change,” Mr. Sharma said.
However, Mr. Ambani exuded confidence that by 2020 India would be a ‘fully-4G country ready for 5G ahead of others’ and that Jio would continue to offer quality service at the “most affordable price.”
The industry has been witnessing intense competition since Jio’s entry in the sector, resulting in its rock bottom tariff impacting revenues of industry players and consolidation in the sector.
“While India's consolidation has not happened in an orderly manner… other than Vodafone-Idea merger… many operators had to go through significant amount of pain and job losses. Nearly 50 billion dollars has been written off and now we have arrived to a point where we are in the right industry structure,” Mr. Mittal added.
Mr. Ambani added that with the Jio GigaFiber, the company was “committed to building a deep-fibre network across the country… and ensuring that every premise is connected with the highest quality network.”
“All of us are proud that India has become the world’s largest mobile data consuming nation. We now have a similar opportunity to replicate this success in fixed broadband as well,” he said.
Mr. Mittal also pitched for an arrangement where all fibre is put together as a national asset and available at a regulatory charge to all users.
Additionally, Mr. Ambani said that data was the most important resource in this new world. “And India and Indians will generate humongous amount of data. It is important that we utilise this rich resource for the benefit of India and Indians, with adequate safeguards.”