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Telecom association COAI says industry is ‘a bit disappointed’ with Union Budget

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The telecom industry is not all too thrilled about Monday’s Union Budget for FY2021-22. In a press statement, the Cellular Operators Association of India’s director general Lt. Gen. Dr SP Kochhar said:

We welcome the budget as it is pro-investment and pro-growth. It will provide the much-needed impetus to economic growth post the pandemic and will set us on the path to becoming Atmanirbhar Bharat. However, we are a bit disappointed that concerns of the telecom sector, which is the backbone of digital India, remained unaddressed. We were expecting a reduction in the burden of levies, such as LF [License Fee] and SUC [Spectrum Usage Charge] on the telecom sector. The Government has also not considered the request of the Industry to exempt the GST from the payment of Govt Levies such as LF, SUC and spectrum instalments etc.

As the telecom operators are going to launch 5G services in the country, it is imperative that 5G enabled telecom equipment are available to them at a reasonable price. Thus, there was the need for a reduction in customs duties on telecom equipment. It would have been a much awaited relief if the government provided the right incentives to the sector. We will continue to engage with the Government in these areas in the times to come. (Emphasis supplied)

Spectrum auctions are scheduled for March after a long delay, and some of this spectrum may be used for 5G, even though it is not traditionally associated with 5G. The Competition Commission of India said in a study last week that for the sake of the telecom market’s health, reserve prices for 5G spectrum would have to be reasonable.

While 5G has been something Vi and Airtel have been cautious about rolling out too soon, the latter telco recently announced that it was the first telco to hold a trial of the technology over a commercial network in Hyderabad. All telcos are pursuing 5G technology that is based on the interoperable OpenRAN group of standards. Chinese telecom suppliers like Huawei and ZTE are not expected to be involved due to border skirmishes between India and China, and pressure from the United States to abandon Chinese vendors.

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