Department of Telecommunications (DoT) all set to exceed FY23 targets

In addition, the government collected more money from the recent spectrum auctions than was anticipated.

September 26, 2022 6:44 IST | India Infoline News Service

The government is on track to repeat its feat of exceeding the planned objective of revenue receipts from the telecom sector in FY23, with likely earnings of Rs67,000 crore as opposed to the aim of Rs52,806.36 crore.

According to officials who talked to ET, the feat is made possible in part by Bharat Sanchar Nigam (BSNL), which will pay the Department of Telecommunications (DoT) over Rs30,000 crore for spectrum allocation in the 900 MHz and 1,800 Mhz bands. In addition, the government collected more money from the recent spectrum auctions than was anticipated.

The DoT would receive approximately Rs14,000 crore from licence fee revenues and another Rs5,000 crore from spectrum usage charges (SUC), in addition to upfront spectrum payments and BSNL receipts. The DoT used to receive approximately Rs7,000 crore per year in SUC revenues, but moving forward, the sum will start to decline because there won't be any SUC on airwaves purchased in the auctions. Telcos are not required to pay any SUC for the spectrum they purchased through the 5G auction.

Contrary to the anticipated goal of Rs53,986.7 crore, the telecom sector's income receipts in the most recent fiscal year exceeded Rs85,000 crore. The pre-payment of spectrum instalments by Reliance Jio and Bharti Airtel allowed for the excess mop-up. Jio pre-paid Rs30,791 crore to settle all outstanding debts related to spectrum purchased through auctions before to March 2021, while Airtel paid Rs24,334 crore to settle outstanding debts related to delayed payments from earlier auctions.

However, the causes for exceeding the revenue target this fiscal year are a little different. The first reason is that BSNL paid the DoT about Rs30,000 crore for spectrum allotment. Another factor is the higher upfront payment made by Airtel for the just-finished 5G spectrum auction. Reliance Jio, Vodafone Idea, and Adani Data Networks, the other three winners, have each made their first instalment while Airtel has already paid the DoT Rs8,312.4 crore, covering four years' worth of instalments ahead.

Compared to the budgeted amount of Rs5,000 crore, the DoT has overall received Rs17,875 crore in upfront payments for the 5G auction.

Due to the altered circumstances, the DoT had planned a very small sum for upfront payments notwithstanding the 5G auction. Operators had to pay 25% or 50% upfront for different spectrum bands in previous auctions, but the 5G auction did not include this requirement. Only the first instalment of the total payment was required upfront from the telcos.

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