It’s that time of year when everyone’s eye is on the government as the government announces annual budget. No matter, whether its food and agriculture industry or education industry, budget affects all in some way or the other. Telecommunication industry is not an exception.

The main benefits for the telecom industry include reduction in customs duty and exemption from excise duty which means that prices of wireless data cards and set top boxes will tend to get reduced. Also the prices for convergence products while bundle broadcasting and data services together such as triple-play, DTH, IPTV and mobile TV will get reduced. This in turn will result in boosting the market, of which cable operators should take advantage.

This year budget gives no extention in Sunset clause for STPIs which is seen as a dampner for IT/ITeS companies. However the telecom companies will get benefited from marginal decrease in CENVAT from 16 to 14 percent.

The cut in the project import duty can be considered to be a benefit for the new telecom service providers who may think to strengthen their services globally.

The Budget has increased the outlay for setting up telephones in villages under the Universal Services Obligation Fund from Rs 1,450 crore in 2007-08 to Rs 2,000 crore for 2008-09. The Government’s collection from licence fee in 2007-08 was Rs 21,533 crore, which is almost double compared to the Budget estimate of Rs 9,902 crore. The increase has been due to the collection from new players.