The Hindu Business Line

COAI seeks clear roadmap for telecom sector, post polls

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The Cellular Operators Associatio­n of India (COAI) on Tuesday said the new government post elections should set out a clear roadmap to ease the burden of levies on the telecom sector.

Issues such as cut in licence fee and spectrum charges should also be taken up at the earliest.

The COAI said revenue continues to remain under pressure for the industry saddled with high debt. For most players, EBITDA generated “is not enough to meet the interest expenses”.

“The definition of adjusted gross revenue (AGR) should be reviewed to include revenue from licensed activities only. The telecom department should adopt the recommenda­tions by the regulator for determinat­ion of the AGR,” said Rajan S Mathews, COAI’s Director General.

The COAI said that income from interest, dividend, or capital gains from sale of fixed assets; gains from forex fluctuatio­n; and income from rent, insurance claims and distributo­rs’ margin should not be included in revenues for computatio­n of licence fee and spectrum usage charges.

“Once you address the AGR definition issue, it has cascading benefits... that is the first thing they (the new government) should look at. Second, the issue of double taxation. If payment for spectrum is given upfront, why should the industry be taxed for spectrum usage charge and licence?” he asked.

He added that if these outstandin­g issues are dealt with in the first 6-9 months by the new government, it would yield “sizeable benefits” for the industry.

“It would also send a clear signal to both industry and investors that the government is serious about getting the sector back on its feet,” Mathews said. Rajan S Mathews, Director General, COAI

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