'Structural issue in the telecom industry needs to be corrected'


NEW DELHI : With issues such as spectrum auction and double taxation facing it, the telecom industry is suffering from a "structural issue" which needs to be corrected by the government, Chief Executive Officer and Managing Director of Vodafone India Sunil Sood said here on Thursday.


"Our belief in COAI is that there is a structural issue in the industry which needs to be corrected," Sood said on the sidelines of the Annual General Body Meeting of the Cellular Operators Association of India (COAI).

"The government said that they wanted to auction the spectrum, but they did not change the profit sharing which they had in the past. There should not be charges over and above the auction because market discovery has a value and spectrum has already discovered it," he added.

On the imposition of 18 per cent Goods and Services Tax (GST) on the telecom sector, Sood expressed concern and said that the rise of tax slab will have an increasing impact on the industry.

"In GST, as an economy we have moved to consumption-based charging. The issue is that in the manufacturing industry they killed the excise duty and subsumed it within GST. In our industry, the recommend of excise is less than 3 per cent but that is not subsumed," Sood explained.

"So, therefore, we have had an increasing impact of GST by it going up from 15 per cent to 18 per cent. Our request therefore is to structurally correct that. In our industry also it should be subsumed license free as part of GST."

COAI, the apex industry association for India's telecom sector, in its announcement of its leadership for the term 2017-18 said Sunil Sood will continue as the Vice-Chairman of COAI.

Gopal Vittal, Managing Director and Chief Executive Officer (India and South Asia) of Bharti Airtel, was re-elected as the Chairman.

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