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. Telecom scenario in India. Growth of telecommunication in India is driven by wireless telephonyExplosive Growth Current approx 85 million subscribers Target by 2008 approx 250 million subscribers Category C" circles continue to witness the highest rate of growth . *Feb 2006 da
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5. Telecom Infrastructure consists of
Passive Infrastructure
Tower
Shelter
Foundation/Civil Work
Outdoor/Indoor Electrical
Power Supply/DG sets
Optical Cables/Ducts
Active Infrastructure
Electronic Equipment
Antennas
6. Benefits of Sharing
7. To be considered as core infrastructure developers
Extremely capital intensive
Attractive terms of investment needed to source equity/debt funding
Cost effective solutions to attract Telecom Operators
Challenges
8. To extend Income Tax benefits under section 80 - I A
Granting Infrastructure status under section 10-23(G) to developers of Telecom Infrastructure as a separate entry under sec. 80-I A (4)
Our Proposal
9. The Income Tax Act under sec. 80-I A(4) (ii) extends Income tax benefits to:
The telecom operators who are developing their own telecom infrastructure.
The developers of other infrastructure like roads, ports,highways, water supply projects etc.
Government of India is committed to provide Rural telephony at affordable prices Justification
10. Whilst prices of electronics as well as rate of customs duty is coming down, prices of passive infrastructure comprising of land, steel, cement etc. is going up.
Income Tax rules allows each operator to claim depreciation benefits on their capex. Common network on shared basis thus would reduce overall depreciation benefits.
Shared infrastructure service provided to the operators would generate additional service tax revenue
Justification
11. Benefits to the Revenue and economy
Overall depreciation allowance by the department will be reduced
Efficient use of capital in the economy
Additional service tax revenues
Benefits to the Consumers
Lower cost of operations to reduce tariffs
Penetration in the rural areas as sharing is the only viable alternative Benefits