What Telecom Sector Expects From The Budget 2022

With 1.17 billion subscribers, India's telecom sector is the second largest in the world. Affordable tariffs, expanded availability, rising 4G and 5G coverage, altering subscriber consumption patterns, and a favorable regulatory environment are all driving the sector's exponential expansion. In 2022, the industry is predicted to contribute 8% of India's GDP, up from around 6.5% today. With the government pledging additional reforms, the sector is optimistic heading into the new year, hoping for a favorable outcome on a 5G spectrum price at the next mega auction. Telecom Sector has various expectations from the upcoming budget 2022 that is going to be happen next month, 1 February 2022.

Reduction in license fees

Telecom companies, among others, have given suggestions to the government outlining their requests ahead of the budget session in 2022. According to sources, the telecom providers have a total value of Rs 35,000 Cr. During the forthcoming budget, it has also urged that the federal government lower charges and GST on license fees and spectrum usage. During the 2019 budget session, the GST on license payments and spectrum usage would be waived. According to the telecom industry body COAI's pre-budget recommendations, which include Vodafone Idea, Bharti Airtel, and Reliance Jio, the government should suspend the universal service obligation fund, which financially supports the rollout of telecom services in rural areas, to relieve the burden on service providers.

Customs duty exemption for critical telecom equipment

The telecom sector, which is saddled with a debt of almost Rs 8 lakh crore, was given a lifeline last year, which included delaying statutory dues for four years and other relief measures. The industry's income is currently recovering, thanks to telecoms' ability to boost pricing, which has increased average revenue per user (ARPU). However, with development in-network, upcoming 5G auctions, and the necessity for high-dollar expenditures, the industry is looking to the Budget for assistance in this next phase. The telcos have suggested that certain telecom equipment used in the construction of infrastructure for 4G and 5G wireless services be exempt from basic customs duties. Customs tax exemption on vital telecom equipment is expected, which would aid service providers in laying down additional fiber and improving the connection.

Assistance - Financial, policy, and regulatory

"Digital Transformation" and "Innovation" will continue to be buzzwords in the financial services business, whether it's banking and capital markets, insurance, investment management, real estate, and so on, bolstering the telecom industry. As India prepares to enter a period of sustained economic recovery and expansion, one of the keys to success is continuing to implement required reforms and assisting the telecom sector in playing an important role in the country's economic and telecommunications development. However, the Department of Telecommunications' newly announced telecom reforms is a good start. Industry experts feel that continuing to promote legal clarity, predictability, and worldwide uniformity would encourage even more innovation and investment, particularly in critical areas like cybersecurity, Artificial Intelligence, and 5G.

Better export ecosystems through better and more trade agreements

In 2022, India's investment outlook will be characterized by a greater emphasis on clean and sustainable growth, as well as using local production strengths. With government measures boosting many businesses, these developments accelerated last year. Furthermore, India is willing to increase its commercial networks and accelerate bilateral trade deals with the world. Despite the various problems, price wars, and huge debt, the telecom sector of India is growing increasingly year on year. In budget 2022, the sector is expecting a better export ecosystem through more trade agreements with the world to increase its dominance and strength in the country. However, there are various other expectations, but, an better export ecosystem and trade agreements would help the growth cycle.

Fiscal incentives to drive domestic innovations

In boosting rates in response to the government's rescue package may have helped the telecom sector avoid a catastrophe, the issues remain as the industry prepares to build out cash-sucking 5G networks in the coming months. Investments are needed in the telecom sector to encourage development and innovation. Fiscales Incentives, FDI, or channeling domestic funds into the mainstream economy can both be used to fund the project. The latter can be accomplished by lowering the costs of investing in financial assets. The sector is asking for tax benefits in the 2018 budget to strengthen its growth cycle, innovate, and expand manufacturing.