Union Budget 2016-17: Impact on the Telecom Sector

FY17 Budgeted receipts of ~Rs. 99,000cr is ~77% higher than net FY16RE of ~Rs. 56,000cr

Mar 01, 2016 10:03 IST India Infoline News Service


The government has budgeted Rs990bn as telecom receipts for FY17. That would imply that the government is expecting a ~Rs2trn auction. This seems unrealistic considering stretched telco balance sheets.  Service tax on spectrum cost has been introduced. Major telcos will benefit since small telcos / JIO will not get immediate input cost offset. Cess of 0.5% on service tax will hit pre-paid revenue growth considering the weak spending environment .

Telecom – Negative
Key announcement Impact
FY17 Budgeted receipts of ~Rs. 99,000cr is ~77% higher than net FY16RE of ~Rs. 56,000cr We expect recurring and 2015 auction installment amounts at ~Rs. 30,000cr which leaves the shortfall to be financed from 2016 auctions especially 700MHz and one time spectrum charges; at TRAI recommended 700MHz price, it would hugely negative for Bharti and Idea

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