Budget 2017: Govt expects Rs 44,342 cr from telecom, excluding spectrum sales, in FY18

The government has sharply reduced its revenue estimates from the telecom sector for the year 2017-18 at Rs 44,342 crore, which is almost half of its last year’s revenue proceeds from the sector. Interestingly, the revenue estimates do not include any estimated proceeds from sale of any bandwidth, raising questions on whether the government will not hold a sale of bandwidth next fiscal year starting April 1.

“The estimates for non-tax revenues is mainly because additional receipts through spectrum auction which came during 2016-17, is not factored in 2017-18. The telecom receipts as a result, are estimated to decrease to Rs 44,342 crore in 2017-18,” the ?Budget document explains.

The estimates for the next fiscal year include those from annual licence fees and one time entry fees from new operators.

The Budget document further explains the lowered spectrum proceeds from this fiscal year ending March 31, 2017, ?which it says were on account of the 700 Mhz and the 900 Mhz band going unsold in the last October auctions.

“The actual receipts from the spectrum auctions fell short of the estimated numbers. The shortfall in telecom receipts was mainly because the high value 700MHz and 900 MHz bands went unsold as the telecom operators felt that the ecosystem was not yet ready,” the document says.

Last year, the government received a total of Rs 78,715.crore against the estimated revenue proceeds of Rs 98,994.93 crore. This shortfall the budget document acknowledged was a result of the high value of airwaves in the 700 Mhz band.

The government was able to sell a total of just about 41% (956 Mhz) of the 2,354.55MHz of radio waves it had put up for auction last year. This was sold at a total price of Rs?65,789.12 crore, out of which the government received close to Rs 32,000 as upfront payment.

The balance it earned from various other levies, including the spectrum usage charge, the licence fee and so on.

The document further explained that this shortfall against the estimated spectrum receipts was estimated to be covered through enhanced receipts from the dividend payments, particularly from the public sector enterprises.