Government may be on target on telecom revenues despite weak auction

Despite a tepid response to the recent spectrum sale, the department of telecommunications (DoT) is still likely to earn around Rs 1.20 lakh crore as revenue receipts this fiscal on the back of past auctions and regulatory levies with state-run BSNL alone accounting for half of it.

The government had targeted revenue receipts of Rs 1.20 lakh crore from the telecom sector in the interim budget presented in February. The figure is likely to be retained in the full budget to be presented later this month, officials said, asking not to be named.

"We only targeted Rs 500 crore from the auction but we will get over Rs 1,100 crore in case telcos choose to pay in instalments. In case of full payment by one or more operators, the amount will be higher," one official privy to the details told ET.



Another official said the auction has no impact on the revenue receipts of the telecom sector.

As per estimates, Rs 16,000-20,000 crore is expected to come from past auction dues and another Rs 40,000-50,000 crore from spectrum usage charges (SUC) and licence fee. BSNL is likely to pay around Rs 60,000 crore as spectrum dues for 5G airwaves in 700 MHz and 3300 MHz band.

Usually, there is around a 10 per cent increase in licence fee and spectrum charges annually as the revenue of the sector is increasing. Telcos pay around 8 per cent of their adjusted gross revenue as licence fees and around 0.5 per cent as SUC.

One of the officials said the revenue receipts from the telecom sector may decrease next fiscal year starting April 2025 as spectrum needs of all the telecom operators, including BSNL, will be fulfilled for the time being. While BSNL never participates in auctions, it pays a market determined price for airwaves. The government, in turn, puts in money in the state-run company as equity.


In the last few years, the government has approved a few revival packages for BSNL and MTNL. In 2019, a RS69,000-crore package was given to the two state-run firms. In 2022, a second revival package worth Rs 1.64 lakh crore was given while in June last year, the Cabinet had approved a third revival package to the tune of Rs 89,047 crore.

The revival packages included allocation of spectrum in 700 MHz, 900 MHz, 1800 MHz, 3300 MHz, 26 GHz and 2500 MHz bands worth Rs 1.34 lakh crore.

The government raked in a modest Rs 11,340.78 crore from its second 5G spectrum sale that ended last week, with Bharti Airtel emerging the top buyer of airwaves amid an expectedly muted bidding activity in an auction that lasted for seven rounds and ended in just over one day.