Budget 2019

Centre expects to double revenue from spectrum auction in 2016-17

Our Bureau New Delhi | Updated on January 20, 2018 Published on February 29, 2016

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The Centre expects to double the revenue from communication services to ₹98,994.93 crore in 2016-17, from the telecom spectrum auctions and other fee levied by the Department of Telecom.

As per the Budget 2016-17 documents, the said amount is almost double the revised estimates for the current financial year at ₹56,034.35 crore. The Budget had earlier estimated at ₹42,865.62 crore in the current financial year.

The DoT had conducted simultaneous spectrum auction in March last year in 2100 MHz, 1800 MHz, 900 MHz and 800 MHz bands. The total spectrum on offer was 470.75 MHz, out of which 418.05 MHz (88.8 per cent) was allocated to bidders and the value realised was ₹1,09,874.91 crore (67.8 per cent more than the value of the allocated spectrum at reserve price).

“Collection of spectrum usage charges during 2015-16 (up to November 2015) is ₹5,568.40 crore,” said the Budget document. The arrears of the previous years and receipts from fresh auction are also included in the Budget Estimates 2016-17, it said. With auctions due in June-July, the Centre is confident of achieving more revenues by next year, analysts said.

New auction

“This will be an achievable target because part of it will come from deferred payment from the auction last year, which will flow into the account now. It is an incremental target to proceed and the government must be confident of achieving the target,” Hemant Joshi, Partner, Deloitte Haskins & Sells LLP, told BusinessLine.

The DoT plans to auction new bands of airwaves this year, including the ‘premium’ 700 MHz band in June-July. As per the Telecom Regulatory Authority’s of India’ proposed reserve prices, the Centre is expected to fetch around ₹5.36 lakh crore. The DoT also collects recurring licence fees from various operators and gets one-time entry fee from new operators. Spectrum charges are levied by DoT on service providers for usage of spectrum and are calculated either as a percentage of their adjusted gross revenue (AGR) depending upon the quantum of spectrum assigned for their network or at flat rates or on the basis of formulae (for others).

It also said that barring a few services, the licence fee is collected based on percentage share of the operators’ AGR and includes a component of Universal Access Levy.

Published on February 29, 2016
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