KOLKATA: Telecom secretary MF
Farooqui has urged the Department of Economic Affairs (DEA) to speedily clear a
compost of incentives to give telecom tower companies like Bharti Infratel,
Viom Networks, Indus Towers, GTL and Reliance Infratel a shot-in-the-arm.
n the run-up to the next Union budget that will be placed by the new government post-conclusion of the current Lok Sabha elections, the telecom secretary has urged DEA to hasten clearances for accelerated depreciation benefits and also pave the way for concessional loans with longer tenuresthe telecom secretary has urged DEA to hasten clearances for accelerated depreciation benefits and also pave the way for concessional loans with longer tenures of 12-to-15 years to help cash-strapped tower companies meet capex costs, according to government documents.
n the run-up to the next Union budget that will be placed by the new government post-conclusion of the current Lok Sabha elections, the telecom secretary has urged DEA to hasten clearances for accelerated depreciation benefits and also pave the way for concessional loans with longer tenuresthe telecom secretary has urged DEA to hasten clearances for accelerated depreciation benefits and also pave the way for concessional loans with longer tenures of 12-to-15 years to help cash-strapped tower companies meet capex costs, according to government documents.
Farooqui has also urged DEA to
examine whether tower companies can take the overseas borrowings route to meet
working capital needs and repay rupee loans. At present, the finance ministry
only allows telecom companies to tap the external commercial borrowings route
for spectrum payments and capex. It does not allow repayment of Indian debt
through ECBs.
Though DEA has included telecom as
an infrastructure sub-sector in the harmonized master list, Farooqui believes
without these complimentary incentives, it will be difficult to "realise
the impact of such inclusion".
"Telecom is a capital-intensive
sector and a suitable resolution to these issues would step up investments and
improve penetration to unreached areas," says Farooqui in a letter to DEA
secretary, Arvind Mayaram. But in an accompanying note, the DoT has rejected the
telecom infrastructure industry's demand for excise exemption and import duty
cuts, and has communicated as much to the DEA. "We do not support lowering
of import duties on telecom finished products as all items required by tower
infrastructure providers are available domestically," says the DoT in this
supplementary note.
DoT, however, has made a strong pitch for provision of
viability gap funding (VGF) to telecom operators and tower companies to help
them meet their green energy targets mandated by the government. "VGF is
available to long-gestation projects of national importance, and telecom
companies must also be considered for VGF". At present, VGF is extended in
multiple forms such as capital grants, subordinated loans, operation &
maintenance (O&M) support grants and interest subsidy, said a relate DoT
note.
Telcos and tower operators maintain
they cannot meet the immediate Rs 40,000-crore capex requirement for powering
some 2 lakh tower sites with alternate, renewable energy sources such as solar,
fuel cells or wind as part of the telecom department's green policy targets
unveiled two years ago.