28 July 2019
New Delhi: Communications Minister Ravi Shankar Prasad on Saturday said that the government will not tolerate any monopoly and ensure fair competition in the telecom sector while seeking to ease its burden by taking up two key issues - lowering its GST rate to 12 per cent and clearing pending input tax credits - with the Finance Ministry.
"I assured them three things.... we want a fair competition. The government will not encourage any monopoly. The department will do its best in ensuring ease of doing business," Prasad told the media after a hour-long meeting with telecom operators to discuss their problems.
The meeting was attended by Mahendra Nahata from Reliance Jio, P.K. Purwar from BSNL, Balesh Sharma from Vodafone Idea and Gopal Vittal from Airtel.
Earlier, Sharma told media persons that many of the current issues, like GST and ITC, have been taken up by the minister with the Finance Ministry. "On 5G, we requested the Minister to ensure a fair playing field. There are four operators in the country and there should be a cap of 35 per cent maximum in every band so that there is a fair competition."
Prasad's assertion on not tolerating monopoly comes amidst the industry often attributing the low tariffs from new entrant Reliance Jio as a reason for their increasing losses since to counter Jio, they also have to lower tariffs to retain subscribers.
The other reason the telcos attribute for their bleeding financial condition is high levies in spectrum charges and licence fees that is cumulatively 30 per cent - the highest in the world.
The high spectrum auction base prices are also cited by them as a key reason for them running whopping debts to tally for paying spectrum auction dues.
Prasad said: "I have told them what we have done for the industry -- we have written to Finance Ministry on pending input tax credit, reduction of GST from 18 per cent to 12 per cent. There is a committee now headed by Additional Secretary Anshu Prakash who will look into reduction in the USO fund fee."
The Minister also asked the telcos to improve quality of service and pool resources so that all the 43,000 uncovered villages are connected in the next one year and said they have agreed.
"I have told them create India specific 5G products... the telecom sector should contribute 25 per cent of the $5 trillion dollar economy," he said.
The telcos expressed concern over the lapsed bank guarantees which they want to be returned and Prasad said the department would look into it.
Prakash will also now look into another key concern of the operators - installation of towers in NDMC and VIP areas to put in a proper system in place because optimum use of government buildings and ministerial areas is necessary, he added.
Prasad said that the operators have agreed to participate in the start-up ecosystem in developing and testing 5G products.