COAI says disappointed after no relief for telecom in economic package

The Cellular Operators Association of India (COAI) on Sunday (May 17) said the industry has been left “disappointed” that its long-standing demand for cut in licence fee and other levies did not figure in measures and reforms announced by the government to boost the economy amid the coronavirus pandemic.

Finance Minister Nirmala Sitharaman announced the fifth and final tranche of the economic stimulus package to deal with the economic fallout of the COVID-19 pandemic.

The booster measures announced on Sunday related to MGNREGS, healthcare and education, businesses, decriminalisation of the Companies Act, ease of doing business, public sector enterprises, and resources related to state governments.

COAI said it is still going through the fine print of the measures announced but added that it is disappointed that the crisis-ridden telecom sector that has demonstrated its ability to maintain connectivity and meet consumer demands for high data and traffic amid lockdown, did not figure specifically in the announcements made.

“We are disappointed, as were expecting that given the importance of the industry and the need for us to continue to invest in networks going forward…putting new cell towers, new fibre to provide the speeds that customer require, the fact that we are supporting additional areas like work from home…we expected some relief for the sector in terms of critical things that we had asked for,” COAI Director General Rajan Mathews told PTI.

“Coronavirus-triggered large-scale migration back to rural areas also means ensuring connectivity and scaling up to meet the additional requirement of rural consumers by bolstering networks,” he said.

“We have been asking for big-ticket items like rationalisation of licence fee and spectrum usage charges….because you have to get liquidity into the industry…we are surprised that what the industry has shown as the necessity of networks would not be translated into assistance for the industry to ensure its orderly growth. That said, we are still hoping that the Government will consider our request,” he said.

Apart from seeking a reduction in statutory levies, the telecom industry has unutilised GST input tax credit over ₹35,000 crore for which the sector has repeatedly demanded refund.

“The Finance Ministers announcement is in line with the government’s aim to provide the necessary impetus to economic growth and build a self-reliant India. We welcome the announcement of all pending payments within 45 days from PSEs to the MSME sector.

The telecom industry has unutilized GST input tax credit over ₹35,000 crore for which the sector has repeatedly demanded a refund,” COAI Director General Rajan S. Mathews said in a statement.

A task force constituted under the finance ministry last month acknowledged stress in the telecom sector and said the Supreme Court judgement mandating companies to pay around ₹1.35 lakh crore has placed some operators in a “precarious position” due to the short period of time in which they have to meet their liabilities.

The Cellular Operators Industry Association, which represents companies like Reliance Jio, Bharti Airtel, Vodafone Idea, etc, reiterated the demand for clearing pending payment by the state-run telecom firms mainly BSNL.

The task force said the telecom sector is already reeling under the financial stress of ₹7.7 lakh crore and the AGR liability is further going to add to uncertainty for some of the companies.

Telecom companies are jointly required to shelve out ₹1.35 lakh crore as adjusted gross revenue dues to comply with an apex court order of October 24, 2019.