TEMA Favors Strong Regulation For Recovery

New Delhi, 7th June, 2012: The Telecom Equipment Manufacturer's Association (TEMA) of India in a communication to Honorable Prime Minister of India Dr. Manmohan Singh has suggested strong regulatory guidelines to enforce the withdrawal of diesel subsidy to the telecom service providers or alternately introduce appropriate onetime Tax per tower on the telecom service providers and telecom tower companies.

Referring to a Telecom Regulatory Authority of India's (TRAI) report, TEMA has communicated that the total number of telecom towers in the country by the end of 2010 were around 400,000, consuming on an average power of around 3-4 kW per tower site, of which about 60 per cent is from off-grid sources. "Currently this number has already gone up and we have about 500,000 telecom towers dotted across the map of India. Going by reports, India will have about 300,000 more telecom towers in the next five year or so. This would mean that in a country which is already power deficient will have to feed about 800,000 telecom towers and the dependency on off-grid source mostly operating on diesel based generator sets will increase many-fold. Which, in turn, would mean more subsidy support for the telecom service providers," said Mr. Ashok K. Aggarwal, Honory Director General.

The TRAI recommendations on Green Telecommunications last year indicated that approximately 8,760 litres of diesel was being consumed annually by each telecom tower site [assuming that on an average each site was operating for almost eight hours on Diesel Generator Sets (DG Sets)], which works out to around 4.3 billion litres per annum of diesel consumption by the 500,000 telecom towers alone. . With an average diesel subsidy of about INR 10 per litre, each year the Government of India is subsidizing INR 4,380 crores to already well off telecom service providers and telecom tower companies. "The subsidy which is actually meant of the rural poor, farmers and bulk transport systems is being mis-utilised. Our submission to the Government of India is to stop subsidising the telecom service operators and telecom tower companies and instead introduce appropriate onetime tax per site. This will create another source of much need finances for the Exchequer and will also ensure that the telecom service operators and telecom tower companies start adopting power efficient infrastructure operating on greener source of energy much faster," added Mr Aggarwal.

As per industry estimates, with the evolution of services and for the expansion of the telecom networks to unconnected rural and other areas, the country is expected to add another 300,000 towers in next five years. Unless there are strong regulatory guidelines to enforce the withdrawal of diesel subsidy or introduction of an appropriate onetime tax, the existing trends otherwise will result in further consumption of diesel to almost 5.0 billion litres in the next five years timeframe and will also result in an alarming increase in CO2 emissions.

Mr. Aggarwal says that the Government should levy a per site onetime tax on all the sites owned by the mobile operators equivalent to 12 years of subsidy, i.e., Rs. 10,00,000/- per site to offset, fully or partially, the loss to the exchequer on account of subsidy. This will give the Government revenue to the tune of Rs. 50,000 crores, which the NATION needs badly at this hour.

Telecommunication Expense Management Association (TEMA)