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BW Businessworld

Budget Doesn't Cover Critical Issues Of Telecom

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COAI the body for telecom operators, equipment manufacturers and infrastructure facilitators in the country has expressed disappointment on the Union Budget 2012-13 as announced by Finance Minister Pranab Mukherjee. The budget announced does not address critical issues related to the telecom as well as infrastructure sectors of the country.

On a positive note, infrastructure funding, including that for cellular towers, Optical Fibre Cables (OFC) and cables have been provisioned to work through Gap funding which seems positive as it is expected to bring down the operating capex considerably.

The provision of Mobile tracking for fertilizer subsidy also looks to be favorable. But apart from that, there are no major takeaways for the industry. Contrary to the recommendations put forth by the industry, no tax relief/benefits have been granted to the telecom industry which keeps reeling under rising operating costs and deteriorating margins.

Moreover, the increase in service tax from 10 per cent to 12 per cent will further affect the growth of the industry as it is detrimental to the objectives of rural penetration and affordable rates for the consumers. The increased costs will eventually be borne by the consumers in the form of higher charges for the services. It is very disheartening that there are still no provisions to support the industry which has been acknowledged as a vital contributor to the nation's economic health. While we are happy that industries like agriculture have received adequate support, the telecom sector has again been deprived of the much required provisions that would motivate the industry to grow.

Pradeep Jain, MD, Karbonn Mobiles

We as a constituent of the ever-evolving communication sector of the country would like to welcome the forward-looking Union Budget for 2012-13. By taking progressive policy measures the Finance Minister has been able to put forth a proposal which will definitely take the country on a path of progression.

While we all acknowledge the contribution of the mobile phone industry to the growth of the Indian economy, it is heartening to know that the expected GDP growth for the financial year of 2012-13 will be in the range of 7.6 per cent.  This growth of the Indian economy being supplemented by the growth in the mobile phone sector of the country is definite to channel the sector on an evolutionary conduit. We welcome the Finance Minister's move to cut customs duty on memory cards for mobile phones which while complementing the usage of storage cards will definitely help in increasing the usage of extensive mobile phones in the country. Another welcoming move which will definitely help in the emergence of India as a communication superpower of the world will be the exemption of mobile phone parts from basic custom duties which while bringing down the manufacturing cost of mobile phones will aid in deeper penetration of mobile phone manufacturers into the untapped portions of the Indian market. These all measures while acting as a liberator to the Indian mobile phone industry will also send in positive signals to the quest of India in becoming a communication superpower and will make real the dream of ‘affordable mobile connectivity', for all.