Airtel, Idea Say IUC Cut, High Taxes, Spectrum Cost Are Impacting Industry

Seeking immediate relief for the stressed telecom sector, older operators - Airtel and Idea Cellular - on Wednesday slammed high levies, increase in spectrum cost and regulatory norms.

"Taxation on industry is very high. It is in the range of 29-32 percent. 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 in New Delhi.

Investment by Bharti Airtel in the last 2 years has been more than that of the past 20 years put together, he said.

Airtel to Invest Rs. 20,000 Crores This Year on Digital Infrastructure: Mittal

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.