The Indian telecom service providers continue their roller-coaster ride. If the March 10 Supreme Court ruling is not in their favor, they will face a setback of a collective monthly payout, based on consumer usage patterns, in the range of Rs. 830 crore and Rs. 4500 crore. The operators have challenged a Delhi High Court order, which upheld TRAI's regulation, mandating telcos to compensate subscribers Rs. 1 for every call dropped on their networks, subject to a cap of three a day, starting January 1, 2016. This is at a time when the telcos are prioritizing their investments on 4G rollouts.
From an industry that has an annual revenue of Rs. 230,000 crore, the government is eyeing to collect Rs. 100,000 crore. Of this, about Rs. 25,000 crore is from the ongoing license fees and spectrum usage, Rs. 20,000 crore from various penalties, and Rs. 55,000 crore from the auction process. Add to this the recently announced 14.5 percent tax for spectrum acquisition. India's commitment to GSMA's digital inclusion policy seems to be going for a toss here.
This is in the backdrop of the yet-to-be-resolved Vodafone's tax issue. Following a February 4, 2016 reminder notice from the income tax department to Vodafone International Holdings BV, seeking Rs. 14,200 crore in taxes, the Finance Minister, Arun Jaitley, on Feb 29, 2016, as part of the Union Budget presentation, offered to waive interest and penalty, if the company pays the principal amount of Rs. 8000 crore.
Dr DPS Seth, former member, TRAI, in an exclusive column authored for Communications Today, has invited the Authority to relook at its recent order on net neutrality. To quote Dr Seth, "An area that needs attention for the growth of broadband is the development of applications specific to rural area customers. This may require, at least for some time, for service providers to be able to offer discriminatory tariffs. This is directly in conflict with the recent TRAI order on net neutrality. While net neutrality is desirable, we may not be ready for it as yet. A relook at the timing of this order is therefore desirable."