CII urges relief relief for telcos

MUMBAI: The Confederation of Indian Industry (CII) has urged the Government to ensure the telecom sector has 3-4 players who survive amidst a health competition, important for national and consumer interests. The body also urged the panel looking into relief measures for the sector to address the issues so that investments in new technologies can usher in.
"CII urges the Government to continue with its policy of encouraging healthy competition in the telecom sector with at least 3-4 key strong players, and work towards addressing the issues facing the sector with that perspective. This is essential in the national interest and the interest of the consuming masses," said the industry body in a letter to the finance and telecom ministers, besides the Prime Minister's Office (PMO) and Cabinet Secretary.

The industry body drew parallels between the airlines and telecom sector where both have faced consolidation, price wars and are capital intensive sectors which have high taxes. The letter highlights the impact of AGR dues which if recovered, will impact viability of telcos and other players in the industry.

"The recent developments on the AGR dues to telecom service providers (TSPs) have triggered a great deal of concern not only to the seriously-affected TSPs, but also amongst others who are part of the overall telecom eco-system," said CII on the industry which now has only three private players.. "The precarious financial health of key players in this sector and their massive debt burden (estimated to be Rs 7 lakh crores), threatens not only their individual existence but also the much-needed vibrancy in this important sector.," the note added.

CII's note comes on the back of a Supreme Court verdict on AGR following which all telecom license holders have to pay dues based worth Rs 1.3 lakh crore.

The industry body recommended that the government "revisits" the revenue sharing business model for relevant sectors. "Competitive and transparent revenue-sharing model will also address the possible adverse impacts on banks, who have large exposure to these sectors," it added

CII highlighted that operators have played a central role in ushering in the mobile revolution and spurring rapid digitisation . The telecom services will be the productivity-enhancer and multiplier for all sectors of the economy, more so with new technologies driving rapid digitalisation and increased digital penetration.