NEW DELHI: The department of telecommunications (DoT) has sharply lowered the spectrum auction revenue target for FY24 to a modest ₹500 crore from ₹5,000 crore estimated earlier, officials aware of the details told ET. The department, though, still expects to generate ₹85,000 crore in revenue receipts this fiscal, the officials said. They added that the upcoming auction, which the DoT is looking to hold in March, will only draw a few bids from Bharti Airtel and Vodafone Idea (Vi) for renewing their airwaves, and the total sale could fetch around ₹2,000-₹3,000 crore, of the nearly ₹1 lakh crore worth of airwaves that would be up for sale. This would mark a sharp decline from the record ₹1.5 lakh crore that the government raked in from the last 5G auction in August 2022.
“While spectrum worth over ₹97,000 crore will be up for sale, the operators may not bid much as 5G requirements have been fulfilled for the time being. The incumbent telcos would like to renew their existing spectrum holdings,” an official said on condition of anonymity.
Another official said a portion of the total proceeds in the upcoming auction will be generated this fiscal as upfront payment or the first instalment due to which the DoT has kept ₹500 crore as the revenue receipt target from the auction for FY24. But despite a likely lacklustre auction, the DoT is expected to garner ₹85,000 crore in revenue receipts for FY24.
“Due to revision of spectrum auction receipts, the overall revenue target from telecom sector for FY24 has been cut to ₹85,000 crore from nearly ₹90,000 crore earlier,” said the second official.
As per estimates, the DoT will garner ₹50,000 crore from license fee and spectrum usage charge (LF/SUC) payments and spectrum instalments from past auctions. Around ₹22,000 crore will come from adjustment of BSNL adjusted gross revenue (AGR) dues and ₹11,000 crore from 4G spectrum for the state-run firm.
The DoT is planning to hold the spectrum sale in March as the permits of Bharti Airtel and Vi will expire in 2024 in some circles. Airtel’s airwave renewals this year are in the 900 MHz and 1800 MHz bands in the circles of J&K, Odisha, Bihar, UP-East, West Bengal and Assam. Vi faces spectrum renewals in West Bengal (900 MHz and 1800 MHz) and UP-West (900 MHz).
In case the auction is not concluded on time, or the spectrum validity has expired, telcos will be given three months to continue using the frequencies with a condition that they pay in advance the reserve price of the airwaves for the period. As per Jefferies, Airtel and Vi merely have to renew airwaves worth around ₹4,200 crore and ₹1,950 crore respectively, while market leader Reliance Jio does not have any spectrum renewal slated this year.
Source: The Economic Times
