Budget Expectation: MTS CEO Looks for Tax Cut for Natural Growth, Rural & Broadband Connectivity

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Budget Expectation: MTS CEO Looks for Tax Cut for Natural Growth, Rural & Broadband ConnectivityA financial year to be ended and media is now excited with the Union Budget 2012-13 which will be published soon.

Telecom market is also excited and voices for some demands for the betterment of the industry. The telecom market of India is still on the phase of expansion and attractive to operators, passive infrastructure providers, equipment vendors, OEMs and other related industries. Telecom industry today has become as important to the economy as another basic need for people.

Vsevolod Rozanov, President and CEO of Sistema Shyam Teleservices which operates in the country under brand name of MTS India expressed his expections from this upcoming Union Budget.

“Inspite of the numerous challenges being faced by the Indian telecom industry, the 2012 budget presents yet another opportunity for the government to set some systemic elements right. From a global perspective, the telecom industry in India attracts the highest tax of 23%. Looking in AGR terms, the industry generates revenues of approx. Rs 122,000 crore, out of which Rs 28,000 crore is the approx. outflow to the exchequer. This needs to be rationalized on a priority. The telecom industry is clearly getting squeezed on account of such outflows and what makes the situation all the more difficult is the hesitation of banks to lend money to operators. All this naturally has a deep impact on the roll out of voice and data services for the common man, specially in the rural areas.", He said

He also added that "Equally significant is the fact that broadband penetration in India stands at just 1% as against the wireless teledensity of 74%. With the national broadband plan envisaging 160 million broadband connections including 60 million wireless broadband connections by the year 2014. There does exist a need to support this growth path. Levy of zero service tax on internet and broadband service would certainly act as a catalyst in this process."

If you see 3G operators are already debt-ridden and 3G is yet to take off. And to push rural broadband connectivity Govt must ensure participation of private players by tax relaxtion as urban market growth is mostly due to presence of private companies. To offer affordable broadband to people of India Govt has to ensure some tax cut and rather follow the revenue sharing model. Govt should try in a manner to support growth of indigenous companies providing infrastructure and end-user gadgets.

Already Airtel, Micromax, Tulip Telecom and others have voiced their concerns over tax relaxation and flexible taxation on import duties for mobile equipments, broadband services and spectrum use.


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