Telecom industry's cash deficit touches Rs 1.2 lakh crore- Rcom

High taxes and intense tariff war is likely to push Indian telecom operators to the wall, leaving a gaping Rs 1,20,000 crore deficit between the industry's earnings and its debt/payment commitments this year, says debt-laden Reliance Communications. 
 
In FY18, EBITDA of the industry has reduced to Rs 43,000 crore while about Rs 1,62,000 crore is expected to add up to annual interest payments, loan repayment obligation, spectrum-related outgo and CapEx which making the operators inadequate to meet the commitments of existing debt obligation and deferred payment.
 
As on March 31, telecom industry’s gross liability (on account of debt and payment) related to radio waves is about Rs 7,75,000 crore.
 
The financial year 2016-17 reported the first ever decline in revenue of the industry. It was estimated that the combined revenue of telcos has come down to Rs 2.10 lakh crore, which has resulted in a decrease in EBITDA by Rs 12,000 crore , means the lower operating cash flows for the industry and it was further estimated that in the financial year 2017-18 the revenue is further decline by Rs 25,000 crore.

In the Indian economy telecom industry is one of the highest taxed sectors as compared to other countries in the world. As per Rcom, “Industry wants deferment of payment liability with respect to levies (imposed by the Telecom Department) and spectrum charges by three years.The industry also wants a three-year moratorium on service tax/GST, for short-term cash flow relief. Other demands include reduction of the licence fee to 5 percent (from 8 percent) and flat one per cent spectrum levy”.