Bharti Airtel Chairman urges review of taxes and levies in India to ease pain of telecom sector

Bharti Airtel Ltd Chairman Sunil Mittal on Friday urged the government to review taxes levied on the telecom companies including spectrum usage charges and license fee, saying such resources should not become a source of income for the exchequer.

“It is time for the government to now ensure that this industry, which has had its ups and downs, is now given due attention in the area of levies and taxes. Taxes have generally been high for this industry. It is important that this is reviewed thoroughly,” Mittal said.

Mittal, who was speaking at the ‘25 Years of Mobility’ web conference, said resources such as spectrum and levies should be a “force multiplier to ensure that economic momentum becomes faster and gets accelerated”, while implying that the government can earn its dues from other industries dependent on the telecom sector.

The Cellular Operators Association of India (COAI), in a letter to finance minister Nirmala Sitharamanin June, had also sought relief for telecom operators including Airtel, Vodafone Idea Ltd and Mukesh Ambani’s Reliance Jio Infocomm Ltd, urging that the effective rate of spectrum charges should be reduced by 3% for all service providers and license fee contribution should be lowered to 3% from 8% with immediate effect.

Mittal has been vocal about seeking relief for the sector on other occasions as well.

In a letter published in the Bharti Airtel annual report released on Tuesday, Mittal told shareholders in remarks published that the telecom sector is not out of “the woods” yet, and that he hopes the government will look into the urgent requirements of telecom operators.

Mittal said the sector requires government support and an end to “long-standing legal disputes” to help revive its financial health.

“India still has some of the lowest data tariffs globally and the industry is barely able to cover the cost of capital. It requires much more support to repair the deep damage to its finances and make it viable for telecom operators to invest in future technologies,” Mittal said.