Spectrum auctions, high payments to help hit Rs 1.2 trn telco revenue goal

Non tax revenue from the telecom sector rose by 44 percent in FY24

Another round of spectrum auction, along with higher incidence of payments by telecom operators has led to a 28.5 per cent higher estimate of Rs 1.2 trillion worth of non-tax revenue from the telecom sector in FY25 (2024-25). 

Under the telecom head, the Interim Budget has listed non-tax revenue collection estimates of Rs 93,541 crore in the Revised Estimates of FY24. As compared to this, revenue rose by 44 per cent in FY24, considering the Rs  64,835 crore received by the Centre in FY23. The next spectrum auction will be held in late February and the reserve price for most bands will remain the same as during the 2022 auction, Department of Telecommunications (DoT) officials said. The government expects operators to go for low bands beginning 600 MHz, licences for many of which are lapsing soon.

 

In the last round of auctions ending on August 1, 2022, the government had put up 72,098 MHz of 5G spectrum capable of offering ultra-high speed mobile internet connectivity. Of this, 51,236 MHz, or 71 percent, of the total was sold with the total bid amounting to Rs 1,50,173 crore.

The earnings from 5G spectrum is almost double of the Rs 77,815 crore 4G airwaves sold in 2021, and triple of the Rs 50,968 crore the government received from 3G spectrum auctions in 2010. Meanwhile, telecom payments collated together, not counting advance payments by telecom firms, amounted to around Rs 55,000 crore in FY24, officials said. 

In January, Bharti Airtel prepaid Rs 8,325 crores to clear high cost deferred liabilities for spectrum acquired in 2015.

BSNL cash infusion

On the expenditure side, the Centre has delivered on its promise of capital infusion into state run-telecom operator Bharat Sanchar Nigam Limited (BSNL), allocating Rs.82,916 crore in the latest budget. Thsi follows infusion of Rs. 52,937 crore in last year's budget in the 2023-24 period was Rs. 52,937 crore.

The move is aimed at providing the beleaguered telco a final support to roll out pan-India 4G services soon, to be updated to 5G soon afterwards. Last year in July, the Cabinet had announced BSNL's authorized capital will be increased to Rs. 2,10,000 crore, up from Rs. 1,50,000 crore. It had also approved the allotment of 4G/5G spectrum for BSNL through equity infusion.

Allocations for the key Bharatnet scheme also rose to Rs.8,500 crore, up 70 percent from Rs. 5,000 crore in the revised estimates for FY24. The ambitious central project aims to provide every Indian village with fixed line broadband connectivity. On the other hand, Rs. 3,751 crore worth of expenditure on providing optical fibre cable based network for defence services that was incurred as of the revised estimate of FY24, has been done away with. Officials said the project has ended.