industry

Centre likely to achieve ₹1.2 lakh crore revenue target from telecom sector


The government is likely to achieve its target of garnering ₹1.2 lakh crore as revenue receipts from the telecom sector, even if there is no big-bang spectrum auction in the next financial year, experts and officials said.
The mop-up is likely to be made possible due to improving financial health of the telecom sector, leading to rise in licence fee and spectrum charges, while a good quantum of money will come from state-run Bharat Sanchar Nigam (BSNL) for its 5G spectrum payment. The company never participates in auctions but always pays a market-determined price for its spectrum needs.
“Usually, there is around a 10% increase in licence fee and spectrum charges annually as the revenue of the sector is increasing. Apart from that, a good part will come from BSNL 5G spectrum payments,” a person aware of the details told ET.

Big Cash inflow

A spectrum auction is planned soon but the response is expected to be muted as the operators had bought enough airwaves in the August 2022 sale to take care of their 5G needs. The auction will primarily be conducted as licence renewal in a few circles of Bharti Airtel and Vodafone Idea is coming up.

As per Prashant Singhal, telecom leader, member firm of EY Global, the government anticipates a nearly 30% increase in revenue from the telecom sector in FY25, reaching approximately ₹1.2 lakh crore, compared to the revised budgeted revenue estimate of ₹93,500 crore for FY24. “With the sector’s revenue growing in early teens, the budgeted estimations suggest that the government may be considering another spectrum sale,” he said.

While the sale may not be big, past auction dues will provide comfort to government revenues along with a good quantum from BSNL.
In June last year, the Cabinet had approved the third revival package for BSNL to the tune of ₹89,047 crore. The amount was to be given through equity infusion to BSNL to pay for its 4G/5G spectrum needs. While spectrum for 4G has been given to BSNL in the current fiscal year, 5G airwaves will be given in next fiscal.

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