ASSOCHAM urges new government to speed up spectrum auction

In its bid to strengthen India's telecom segment, ASSOCHAM has submitted a four-pronged telecom strategy paper to the new telecom minister, Ravi Shankar Prasad to reinvigorate the telecommunications sector by reducing regulatory costs, auctioning available spectrum, extending benefits of infrastructure status and providing an impetus to domestic manufacturing.

The paper titled ‘Suggestions for new government to reinvigorate telecom industry & revive investor sentiment,’ prepared by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) was released at a press conference jointly addressed by T.V. Ramachandran, chairman, National Telecom Council of ASSOCHAM and resident director, Regulatory Affairs at Vodafone India along with Umang Das, chairman, ASSOCHAM National Council on Digital Society and chamber’s secretary general, D.S. Rawat.

In its paper, ASSOCHAM has also urged the new telecom minister to immediately auction all available spectrum with socio-economic benefits valued at over Rs two lakh crore (excluding proceeds from auctions) lying idle with the government in 700, 800, 900, 1800 and 2100 MHz bands.

“Mobile communication can usher in India’s much awaited broadband revolution in a much faster, efficient and cost-effective manner as such adequate spectrum availability is of paramount significance,” the paper noted. “Thus, all available spectrum must be auctioned immediately, ideally in a big-bang auction or in a short timeframe by delivering benefits to society and revenues for government.”

There is also the need to immediately reduce regulatory costs for telecom operators and bring down adjusted gross revenue (AGR) based levies by about one per cent annually during the course of next five years over a defined glide path while simultaneously maintaining revenue neutrality of the government, suggested the ASSOCHAM paper.

“Telecom licensees pay as much as 15 per cent of their AGRs as license fee along with other related charges towards sector specific levies and various central and state taxes borne by service providers,” noted the chamber paper. “Besides, the current AGR definition is controversial and needs to be reviewed and must be referred to the Telecom Regulatory Authority of India (TRAI) for its consultation and recommendation to make it simple and unambiguous.”

ASSOCHAM has also suggested the new government to urgently implement TRAI’s guidelines on trading and sharing of spectrum, besides a clear roadmap should also be laid down for future release of spectrum to give clarity and certainity to the operators.

The chamber has also urged the new government to fully extend the benefits of infrastructure status already granted to the telecom sector two years ago to enhance its competitiveness.

A uniform low-cost right of way charge for towers and optical fibers critical for faster rollout of telecommunications network; assured availability of grid power at industrial rates and preferential/low interest financing and framing of rules under the Telegraph Act for uniform processes for installation and operation of mobile towers across states are certain important steps suggested in the ASSOCHAM paper.

There is also a need to provide impetus to domestic manufacturing by reviewing and rationalizing levies on equipment manufacturing, incentivizing exports coupled with favourable policy support, the paper added. “Refund of excise duty for domestically manufactured mobile handsets, their components, parts and accessories would boost manufacturing, besides focus should also be laid on research and development initiatives to promote innovation in telecom sector.”

The aforesaid critical measures are akin to low-hanging fruits that can be easily picked up and can be implemented in a short timeframe of 30-90 days, noted the ASSOCHAM paper. “A right push to the sector will have a multiplier effect on other sectors and will also boost consumers’ confidence.”