Seeking immediate relief for the stressed telecom sector, older operators, including Airtel and Idea Cellular, today slammed high levies, increase in spectrum cost and regulatory norms.
"Taxation on industry is very high. It is in the range of 29-32 per cent. Spectrum cost is one of the highest and tariff being one of the lowest. All of this need to change to realise dream and vision of Digital India," Bharti Airtel MD and CEO for India and South Asia, Gopal Vittal said at the India Mobile Congress.
Investment by Bharti Airtel in the last two years has been more than that of the past 20 years put together, he said. "The cost of spectrum is among the highest in the world and tariffs being the lowest in the world," Vittal said.
He put the debt of the industry at about Rs 4,50,000 crore and return on capital at about one per cent and "all of this is a problem to acknowledge".
This, Vittal stressed, needs to change if the Digital India dream is to be achieved. He also highlighted issues concerning laying fibre and the policy of mergers and acquisitions.
He explained that telecom companies find it a "painful process" to find access to government buildings when they want to lay down fibre.
"We find the mergers and acquisitions policy, while it is out there, the pace at which it happens is a challenge. And all of this I think needs to be streamlined," the Airtel CEO added.
Vittal observed that though mergers and acquisitions are in place, the pace at which these are executed by the government is "very low".
He acknowledged that the government is involved in easing norms for doing business, but maintained that the industry is facing problems on various fronts.
Idea Cellular MD and CEO Himanshu Kapania said recent market developments have drastically altered industry dynamics, resulting in the sector passing through a phase of severe "financial and mental stress".
Terming the regulatory and financial issues being faced by the sector as the "elephant in the room that no one is talking about", Kapania flagged the recent cut in interconnect usage charge (IUC), firm spectrum prices and high levies like licence fee and GST as big constraints.
"No industry can survive the drastic fall in voice and data tariffs that have plunged to "below cost" levels over the last one year," Kapania added.
The reduction in call connect charges—the IUC rates—will further "deplete" the industry of investible funds, he pointed out.
Kapania warned that the fault lines are already becoming visible as the industry is witnessing a "degrowth".
