Recent union budget has proposed a two percent hike in service tax, which seems to effect telecom sectors badly, mobile users now may need to pay more for their telephone bills. This report seems to be supported as the Bharti Airtel CEO for India and South Asia, Sanjay Kapoor, himself said in a recent talk that the rise in service tax from 10% to 12% will increase cost of services to customers and also impact the P&L of telecom companies. As a highly taxed industry, this will certainly have a further impact on the consumer. So don’t get amazed if you get a fatter mobile bills, next time.
As per the reports from Time of India, Sanjay Kapoor said “that the Union Budget 2012 did not announce anything specifically for the telecom sector, which is awaiting the new National Telecom Policy (NTP) scheduled to be announced in June. On an overall basis, there is nothing that changes the fortunes of the telecom company. They have got more on stake on the telecom policy per se which we are expecting to follow the budget.”
The new National Telecom Policy (NTP), seems to be a major break through in the history of Indian telecom as Govt is planning to fully remove roaming charges and implement one nation full mobile number portability (MNP). NTP also suggest to change the status of the telecom sector to an infrastructure sector which will help the companies to easily accumulate funds and helps in expansion activities.
Kapoor also added “About 30 per cent of what customers pays to a telecom company goes in some sort of taxation or the other and I am not talking about indirect taxation which is income tax. Now when you increase the service tax it is obviously a further enhancement of those levies for the industry“
So in the coming days we can except more telecom companies to come up with price hike and as always the burden lies with the end-user, we the customers.