Telecom sector urges govt for creation of fund for credit facility at lower interest rate

The telecom sector has sought creation of a fund which will facilitate in providing credit facility to companies at a lower interest rate. The demand comes in the backdrop of financial stress being faced by the telecom operators and they are not able to get funding for making investments. The national digital communications policy (NDCP) released by the government last year, also proposed to provide a line of credit to telecom sector.

In order to present their demands, representatives of the telecom sector, including mobile operators, vendors, etc, met telecom secretary Anshu Prakash today. Apart from the line of credit, the industry also sought a cut in levies like licence fee and spectrum usage charges. The department of telecommunications (DoT) has given time till tomorrow to the industry to send their written recommendations, which will be studied by it after which the demands will be sent to the finance ministry.

As per a DoT official, most of the demands made by the sector were on similar lines as before, including reduction in levies. One of the representatives said the industry has requested setting up of a working group with stakeholders from DoT, Telecom Regulatory Authority of India (Trai) and industry which will work on preparing guidelines for adopting the principle of input line credit.

The person added that telecom industry is capital intensive and needs to generate funds from domestic sources at affordable rates. “We have requested the government to facilitate funding at lower rate of interest so as to plough more funds for network upgradation, maintenance and expansion,” said one of the representatives. Other recommendations included reduction in USOF contribution to 3% from the current 5% and licence fee at 1% of adjusted gross revenue. The industry also sought that the payment of regulatory levy should be exempted from tax under GST.

Source: Financial Express