Budget 2019

Budget silent on spectrum revenues

Rajesh Kurup Mumbai | Updated on July 06, 2019 Published on July 06, 2019

In a departure from the past, this year’s Budget is silent on the proceeds from the proposed 4G and 5G spectrum auctions slated by December, even as the Centre expects ₹50,519.8 crore revenue from the telecom sector.

“The final reserve price of spectrum is yet to be finalised, and the Department of Telecommunications (DoT) is still awaiting the regulator’s word on this. The reserve price and also the bands to be auctioned, both in 4G and 5G, are to be decided, without which a price could not be calculated,” a source close to the development told BusinessLine.

This, however, does not mean that there will be no spectrum auctions this year, he said, adding, DoT is working on a war-footing for the spectrum auction.

In a year when spectrum auctions happen, revenue expectations – including that from spectrum sale and non-auction revenues – are provided in the Budget.

In August last year, the Telecom Regulatory Authority of India (TRAI) suggested auctioning of 3,300-3,600 MHz band, expected to be the primary band for 5G services, as a single band and in blocks of 20 MHz each at ₹492 crore per MHz. However, according to the operators, the pricing of the spectrum was “exorbitant”, with companies such as Bharti Airtel threatening to stay away.

The matter was then referred to TRAI, with the DoT asking the regulator to revising the pricing for the benefit of the industry.

NON-AUCTION REVENUE TO RISE

In the Budget, the Government said it expects a 28 per cent increase in non-auction revenue at ₹50,519.8 crore for this financial year, compared with ₹39,245 crore recorded in last financial year.

According to the Budget documents, the government is expected to garner ₹48,661.42 crore in telecom revenues for the fiscal ended March 31, 2019.

The telecom department gets revenues from license fees and spectrum usage charges, which is levied at 8 per cent of the Adjusted Gross Revenue (AGR) after deduction such as Public Switched Telecom Network charges, roaming charges, sales and service taxes.

The Economic Survey 2018-19 said on Thursday that the telecom industry’s contribution to GDP is estimated to reach 8.2 per cent by 2020, when operators start using technologies such as 5G.

Published on July 06, 2019
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