All for Consumers
Telecom service providers are gearing up to enhance their presence across the country by adding more sell sites in A, B and C circles and rural penetration has been on their agenda for some time. In order to improve the purchasing power of rural India, the Indian Cellular Association (ICA), in its budget memorandum for 2007-08, has suggested a subsidy of Rs 750 per mobile sold along with rural connections. "The subsidy should be available to mobile phones worth below Rs 2,000," says Pankaj Mohindroo, ICA.

As part of its proposal for tax benefits, the Internet Service Providers Association of India (ISPAI) has asked for 100% depreciation for computers and broadband customer premise equipment within the first year.

Broadband penetration is lagging at 0.16% and a five-year service tax holiday would assist to enhance the numbers. At present, broadband attracts service tax of 12.24% (including education cess).

"The government should consider our issues raised in the budget recommendations in order to achieve the set target of 20 mn broadband subscribers by 2010. The current growth rate of Internet subscribers is about 30% and we need to grow at 600% to achieve this target. We should also make use of new technologies like WiMax to spread Internet in remote and rural areas," says Rajesh Chharia, president, ISPAI.

According to AUSPI, annual spectrum usage charge is 2-6% of adjusted gross revenue (AGR) of the service provider in India, which is very high as compared to some Asian countries like China, Sri Lanka and Pakistan. In order to offer cost effective services to subscribers, AUSPI has urged the Union government to bring down spectrum usage charges to 0.5% from the present 2-6% of AGR.

"Telecom is one of the important engines of economic growth that fuels activity and trade in all sectors...and enhances overall quality of life in a society" -SC Khanna, secretary general, AUSPI

To Spruce up Production
To improve the growth of production in India and the viability for exports of mobile handsets, the government has to come forward and offer an industry-friendly budget. Removal of inconsistencies and procedural issues in the four manufacturing environments-SEZ, EHTP, EOU and DTA-will force lots of companies to foray into production of handsets.

As India is set to witness more service providers offering pan-India services and more customers' choices for mobile phones, ICA has a two-pronged strategy to increase local manufacturing of handsets. Zero duty should be imposed on mobile cellular handset/phone and their parts, components and accessories to promote manufacturing in India and also create low cost environment for export promotion.

PS Ramesh, president, TEMA, says, "The government should come out with a comprehensive policy on domestic telecom manufacturing. The detailed policy should draw a strategic time-bound plan to ensure a quantum growth of domestic telecom industry with an aim to make India a hub for international manufacturing. India should be recognized as a hardware manufacturing hub especially as a design hot spot for rural equipment."

The high-growth telecom industry has an overall impact on the GDP growth rate. Besides offering direct economic benefits, the telecom sector, where we have both Indian and foreign companies pitching for market share, is also well established as a powerful catalyst-social, educational, quality of life and other cultural activities. Hope the 2007-08 Budget brings the much-needed breather to the industry before the flag off to the next phase of the telecom revolution, may be in rural India.

By our Senior Correspondent
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