Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors
post

Infra expansion, resolution of tax issues, reduction in levies to help telecom industry: ICRA

- Advertisement -

One industry that would surely looking forward to the coming Union Budget for some tax sops and succor from the Government to boost its prospects; and not without reason is the telecom industry. During the last decade, telecom services in the country have witnessed strong growth as is reflected by the steady addition to subscriber (wireless) base which now stands at 1,162 million (teledensity of 89.8 percent).

Image for representational purpose only

The industry has constantly evolved in terms of adopting newer technologies (2G – 3G – 4G) and expanding its service offerings (voice – value-added services – data – broadband). Consequently, mobile services have not only become integral for an individual, but are also essential for delivery of several services (SMS alerts / notifications, or greater digitisation). And not to mention the fact that they have become an integral part of making India digital.

However there are many concern areas that the industry needs to overcome and government’s support in this will be crucial from a future perspective also. Despite the growth, many rural areas continue to remain under-connected because of commercial reasons. Despite significant efforts towards increasing broadband connectivity in villages under the Digital India Mission, the progress has been slow.

- Advertisement -

During the last few quarters, the Indian telecom industry has witnessed a phase of turbulence, – intense competition, pricing pressures and decline in revenues and profitability. The cumulative impact of these factors is that in terms of operational performance, companies in telecom space continue to reported weak performance on Y-o-Y basis which is its showing its impact on profitability indicators of incumbents following sharp correction (down 40-50 percent) in realizations of data services even as data consumption continued to grow at a swift pace.

Given the focus of the Government of India (GoI) on increasing the network/broadband connectivity in the country, especially in the rural pockets, the industry needs some incentivization. Network deployment including laying of optic fibre and installation of towers in rural and remote areas need significant funding and removal of operational obstacles including various permitting risks.

Allocation of more finances to boost infrastructure in rural areas, fiscal incentives on domestic network equipment manufacturing and lower revenue share on telcos’ revenues from rural areas are some of the steps that could be initiated.

Talking about the telecom tower industry, the same is also expected to undergo structural changes with a slew of developments in the coming months. Currently the industry with around 4 lakhs towers and around 8 lakhs tenancies is one of the largest in the world. It has 10 organised players (apart from many small tower owners) wherein 74 percent of the portfolio is held either by tower companies promoted by telecom operators, or by telecom operators themselves.

Over the next 1-2 years, there is likely to be a material change in the industry structure with consolidation reducing the number of players to 4-5 and ownership largely held by independent operators.

The telecom services industry has been under stress over the last one year due to high competitive intensity. The same is expected to continue for some more quarters. However at the same time, the operators need to maintain the capital expansion to meet the growing data needs of the population. Thus the industry seeks some financial incentives which can lower costs of equipment or services.

Recently, the Telecom Commission has accepted the recommendations of the Telecom Regulatory Authority of India (TRAI) to relax the current spectrum holding caps.

While this will benefit the participants, the industry seeks fiscal incentives to ease their cash flows. Apart from assembly of mobile handsets in the country, greater emphasis needs to be laid on development and manufacturing of network equipment in the country. This will lead to higher investment and job creation in the country. Policy initiatives for R&D in the same are required to lower import dependence. In addition, tax incentives can also propel domestic telecom equipment manufacturing industry.

Apart from the steps to boost infrastructure creation, increasing network penetration and manufacturing activities, certain taxation issues need to be resolved. First the discounts offered to subscriber identity module (SIM) distributors are currently treated by tax authorities as a commission for agents and accordingly a TDS of 5 percent is at present applicable. The industry has been seeking either removal or reduction in TDS burden on such discounts for long. Second the telecom industry also seeks reduction in various levies including the universal service obligation (USO) charge.

As for the telecom tower industry it is seeking inclusion of telecom infrastructure service providers under section 72A of the Income Tax Act in order to get the benefit of carry forward of business losses in the cases of mergers and amalgamations. It will bring them at par with telecom operators.

The industry is also seeking inclusion of telecom towers in the definition of plant and machinery for the purpose of input tax credit and extension of deduction allowed under Section 35AD of the Income Tax Act to telecom infrastructure firms for investment made on procuring equipment manufactured in India. The telecom towers companies are also looking for relief by seeking abolition of property taxes on telecom towers.

(Source: ETTelecom)

- Advertisement -

Most Popular Articles

Infineon, Stellantis Partner To Advance Next-Gen Vehicle Power

0
With a dedicated Joint Power Lab and secured supply agreements, the partnership is set to drive transformative advancements in EV performance, cost-effectiveness, and the...

Audi Launches New EV Brand In China, Drops 4-Ring Logo

0
On Thursday, Audi introduced a new electric vehicle brand in China, branding the cars solely with the name 'AUDI' instead of its traditional four-ring...
IIT Bhubaneswar

IIT Bhubaneswar Partners MOSart Labs To Boost Engineering Skills In Chip Industry

0
The aim is to help students with essential skills in areas such as very-large-scale integration (VLSI), semiconductor technology, analog and digital design, validation, and...
Jaguar concept EV

JLR Highlights Its Biggest Reinvention With The Concept Car Jaguar Design Vision

0
The four-door GT is anticipated to be Jaguar's most powerful model to date. Its targeted range is approximately 430 miles (700 kilometers), and its...

ISE Labs Expands With New OSAT Facility In Mexico

0
Turbocharging its growth in North America’s tech hub, ISE Labs is set to build an OSAT semiconductor facility in Jalisco, Mexico, eyeing to create...

“Adoption Of IoT-Enabled SMT Machines Is Still In Early Phases” – Pradeep Tandon, Director...

0
While electronics are becoming smarter through the Internet of Things, is electronics manufacturing following suit? Pradeep Tandon, Director for India, Middle East, and SAARC...
Dr Yashodhan P. Gokhale, Vice President for Battery Technology, JSW Energy

Charge Forward: High-Voltage Batteries And MSMEs Can Fuel India’s EV Revolution

0
A nuanced explanation of low- and high-voltage EV batteries by Dr Gokhale, Vice President for Battery Technology at JSW Energy, illuminates their advancements and...
Sanjay Gupta, CDO & Global Head of Engineering, L&T Semiconductor Technologies

Can MSMEs Contribute And Profit From The Semicon Boom?

0
Semiconductor manufacturing often requires significant investment, typically feasible only for governments or large corporations. But are there opportunities for MSMEs as well? We spoke...
N.P. Ramesh, COO and Co-Founder, Orb Energy

“We Ensured Customers’ Monthly EMI Would Be Equal To Or Less Than Their Electricity...

0
In a conversation with Nitisha from EFY, N.P. Ramesh of Orb Energy outlines the early financing challenges customers faced. He explains how Orb Energy’s...

“Government Policy Should Equitably Address All Electric Vehicles: Extend Subsidies To Retrofits Or Remove...

0
Aryaman Raghuvanshi from EFY engages with Pramod Narendra, Head of Brand Management and Retail Network at Starya Mobility, to explore the overlooked potential of...

Wireless Light-Based Communication With Velmenni’s Technology

0
Velmenni is at the forefront of wireless communication innovation with its pioneering light-based technologies, Li-Fi and LC Link. Founded by Deepak Solanki in October 2014...

Harnessing AI Technology For Efficient Pest Management

0
AI-Genix, an agri-tech startup, is transforming pest management for farmers through advanced AI-enabled systems that precisely target harmful pests. In an industry where pesticides and...

One Charger To Charge All Your Devices

0
Now, there is no need to carry different chargers for different products. This Bhubaneswar startup has launched a universal 65W charger using GaN technology...

Karnataka Government Initiative Promises ₹5M To Tech Startups

0
Boosting innovation and entrepreneurship across the state’s vibrant ecosystem, Karnataka launched Elevate 2024 and KAN, offering grants up to ₹5 million for startups. On Tuesday,...

CastNX Tech Startup Secures ₹232M For Power Electronics Growth

0
Eyeing to boost R&D and produce 100,000 variable frequency drives by 2026, Indian power electronics startup CastNX has secured ₹232.2 million from Plutus Investments. CastNX...

Industry's Buzz

Infineon, Stellantis Partner To Advance Next-Gen Vehicle Power

0
With a dedicated Joint Power Lab and secured supply agreements, the partnership is set to drive transformative advancements in EV performance, cost-effectiveness, and the...

Audi Launches New EV Brand In China, Drops 4-Ring Logo

0
On Thursday, Audi introduced a new electric vehicle brand in China, branding the cars solely with the name 'AUDI' instead of its traditional four-ring...
IIT Bhubaneswar

IIT Bhubaneswar Partners MOSart Labs To Boost Engineering Skills In Chip Industry

0
The aim is to help students with essential skills in areas such as very-large-scale integration (VLSI), semiconductor technology, analog and digital design, validation, and...
Jaguar concept EV

JLR Highlights Its Biggest Reinvention With The Concept Car Jaguar Design Vision

0
The four-door GT is anticipated to be Jaguar's most powerful model to date. Its targeted range is approximately 430 miles (700 kilometers), and its...

ISE Labs Expands With New OSAT Facility In Mexico

0
Turbocharging its growth in North America’s tech hub, ISE Labs is set to build an OSAT semiconductor facility in Jalisco, Mexico, eyeing to create...

Learn From Leaders

“Adoption Of IoT-Enabled SMT Machines Is Still In Early Phases” – Pradeep Tandon, Director...

0
While electronics are becoming smarter through the Internet of Things, is electronics manufacturing following suit? Pradeep Tandon, Director for India, Middle East, and SAARC...
Dr Yashodhan P. Gokhale, Vice President for Battery Technology, JSW Energy

Charge Forward: High-Voltage Batteries And MSMEs Can Fuel India’s EV Revolution

0
A nuanced explanation of low- and high-voltage EV batteries by Dr Gokhale, Vice President for Battery Technology at JSW Energy, illuminates their advancements and...
Sanjay Gupta, CDO & Global Head of Engineering, L&T Semiconductor Technologies

Can MSMEs Contribute And Profit From The Semicon Boom?

0
Semiconductor manufacturing often requires significant investment, typically feasible only for governments or large corporations. But are there opportunities for MSMEs as well? We spoke...
N.P. Ramesh, COO and Co-Founder, Orb Energy

“We Ensured Customers’ Monthly EMI Would Be Equal To Or Less Than Their Electricity...

0
In a conversation with Nitisha from EFY, N.P. Ramesh of Orb Energy outlines the early financing challenges customers faced. He explains how Orb Energy’s...

“Government Policy Should Equitably Address All Electric Vehicles: Extend Subsidies To Retrofits Or Remove...

0
Aryaman Raghuvanshi from EFY engages with Pramod Narendra, Head of Brand Management and Retail Network at Starya Mobility, to explore the overlooked potential of...

Startups

Wireless Light-Based Communication With Velmenni’s Technology

0
Velmenni is at the forefront of wireless communication innovation with its pioneering light-based technologies, Li-Fi and LC Link. Founded by Deepak Solanki in October 2014...

Harnessing AI Technology For Efficient Pest Management

0
AI-Genix, an agri-tech startup, is transforming pest management for farmers through advanced AI-enabled systems that precisely target harmful pests. In an industry where pesticides and...

One Charger To Charge All Your Devices

0
Now, there is no need to carry different chargers for different products. This Bhubaneswar startup has launched a universal 65W charger using GaN technology...

Karnataka Government Initiative Promises ₹5M To Tech Startups

0
Boosting innovation and entrepreneurship across the state’s vibrant ecosystem, Karnataka launched Elevate 2024 and KAN, offering grants up to ₹5 million for startups. On Tuesday,...

CastNX Tech Startup Secures ₹232M For Power Electronics Growth

0
Eyeing to boost R&D and produce 100,000 variable frequency drives by 2026, Indian power electronics startup CastNX has secured ₹232.2 million from Plutus Investments. CastNX...