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Sharing of passive and active infrastructure and

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Unformatted text preview: e: To achieve a subscriber base of approximately 700 million by 2012, Telecom industry in India will need capex investment of approximately USD18 billion to USD20 billion in this period. Sharing of passive and active infrastructure and intra-circle roaming, would be some ways to bring down the capex requirements. Most importantly, to attract further capital into the country, it is very important for the Government to provide a stable regulatory regime to maintain the confidence of the key stakeholders and investors in the Telecom sector. • Need to revisit the high levies on the Telecom sector: The Indian Telecom sector is one of the highest taxed sectors in the developing world. This is through levies, which comprise service tax, revenue share, spectrum cess and value added tax totaling to approximately 25% of the total levies payable by operators apart from income tax on their profits, which ranges from 10% to 33% of profits depending on the eligibility of tax concession for some of the operators. Revisiting high duties and levies in the sector would help reduce costs and the benefits can eventually be passed on to the customers by further lowering of tariffs. • Most importantly, an urgent need for clear roadmap vis-à-vis telecom regulations: There is an urgent need for stable policies and a conducive and consultative regulatory environment to improve investor optimism in the sector. A clear roadmap for future spectrum allocation has to be drawn, whether it is a 2G or 3G platform. The allocation of adequate spectrum is an urgent requirement for new and existing operators. Operators should be careful in bidding for spectrum and should not end up overpaying. While there is significant interest between the incumbents and the new players, interest from new international entrants may be muted, in part by the global economic outlook. The prospect of paying the Universal Access Service License (UASL) fee without any guarantee on the timeline for getting the 2G spectrum, coupled with the advantages that incumbents enjoy with an established infrastructure, may act as a deterrent for the entry. • Uncertainty in the global economic scenario: The current financ...
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