Indian Telecom Financial Health Grave, Needs Help: COAI

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The importance of telecom services has become crystal clear amidst the lockdowns and the pandemic. For the operators to keep innovating and providing seamless services, their financial books should end on a positive note each year. However, this is not what is happening in the industry. The Indian telecom industry is cash strapped, and two of the operators, including Bharat Sanchar Nigam Limited (BSNL) and Vodafone Idea (Vi), are facing the most issues. The Cellular Operators Association of India (COAI), which represents operators including Vi, Bharti Airtel, and Reliance Jio, said that government needs to look into the matter and help the industry a little.

Indian Telecom Operators Taxed Heavily, Asked to Pay Unrealistic Money for Spectrum

As per a PTI report, COAI Director General S.P. Kochhar said that the financial health of the Indian telecom industry is not good, and everyone knows that. Kochhar believes that government should step in now and help the cash-strapped telcos with their operations.

It is not even about providing the industry with a relief package. The Indian government can help the operators simply by being less greedy. Indian telecom operators have to pay almost 38% of their revenues to the government in the form of tax. Further, when it comes to spectrum pricing, the Indian government avails spectrum to the operators at the most premium rates when compared with other nations.

With the upcoming 5G spectrum auctions, the government can be a little less greedy and help the operators and industry by availing the spectrum at reasonable rates to them. Further, it can delay the payments for adjusted gross revenue (AGR) dues for operators by 1 or 2 years so that they can focus completely on rolling out 5G. Vi might not be thinking too much about investing in 5G because of the mountain of debt it has on its books.

Kochhar highlighted that the government is missing out on the fact that as telecom services improve in the country, its secondary revenues from other sectors and businesses will grow. With 5G, the way people communicate will take a huge leap. Because of that, the government will be able to increase its revenues from other institutions and sectors as well.

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