Union Budget expectations from the telecoms sector
5G infrastructure, increased mobile data usage and greater fixed broadband play – is gearing up for the next wave of growth. The sector’s adjusted gross revenue (AGR) grew 8.2% y-o-y in FY24, while for the quarter ending Sep-24, it grew 13.1% y-o-y. Throughout 2024, the Government of India has adopted progressive measures to help improve telecom operators’ financials. Now is the time to take it a notch further and accelerate the superlative transformation of the sector.
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Regulatory levies and taxes in India continue to be one of the highest in the world. To alleviate the financial burden on operators, the current 8% license fee, including contributions to the Digital Bharat Nidhi, must be reduced. As is the practice in most of the countries, the license fee charged should cover only the administrative cost. Necessary corrections/measures are required to make the sector more attractive and profitable. The telecoms sector has been the backbone of the digital economy on which the entire start-up ecosystem has thrived. Currently, India is the 3rd largest start-up ecosystem globally, with home to approximately 118 unicorns. They rely on a robust digital infrastructure to innovate and solve real-life challenges for the people in India. Having access to high-speed broadband network (both fixed and wireless) is a prerequisite to further the digitization in the country. It would translate to greater socio-economic benefits.
