At Rs 40,000 cr, DoT seeks 6% rise in budget to boost rural connectivity

The Department of Telecommunications (DoT) has sought allocation of Rs 40,000 crore from the Union Budget, nearly 6 per cent higher than last year, for strengthening services and pan-Indian expansion of the network. The budgetary provision will be spent on mobile and internet connectivity in rural India, besides connecting the mainland with Andaman and Nicobar and Lakshadweep.

The allocation sought by the department in 2018-19 was Rs 38,000 crore but the same was revised to Rs 30,000 crore. The allocation sought is in line with the interim Budget.

“Our initiatives like enhanced rural connectivity are spread over several years but we need to invest in them at proper intervals,” an official said.

The DoT also expects to earn Rs 44,000 crore during the current fiscal year from spectrum auctions, spectrum usage charges and license fees.

Airwave sales are expected by the end of the calendar year as stated by the newly appointed Telecom Minister Ravi Shankar Prasad.

However, experts feel that auctions at a time when the sector is under tremendous stress may not be a good idea.

“5G will give the ability to deal with volumes but the problem is pricing. Companies will not only invest in the spectrum but will also have to invest in equipment. The key question is from where the money will come from,” said Hemant Joshi, partner, Deloitte Haskins & Sells LLP.

Airwaves in the 3300-3600 MHz 5G band will be auctioned in a block size of 20 MHz.

Also, the reserve price for the premium 700 MHz spectrum had been reduced by around 40 per cent to Rs 6,568 crore per MHz pan-India from Rs 11,485 crore in 2016 after it went unsold in an auction. The base price had to be reduced as there were no takers for this expensive spectrum.

The Telecom Regulatory Authority of India (Trai) has recommended pan-India base price of Rs 492 crore per megahertz for 5G radiowaves, and it lowered the base price of frequencies that remained unsold in the 2016 auctions.

The regulator also recommended a base price of Rs 4,651 crore for paired spectrum in the 800 MHz band covering 19 circles, Rs 1,622 crore per MHz for the 900 MHz band covering seven circles, Rs 3,399 crore per MHz of in the 2100 Mhz covering 21 circles, and Rs 821 crore per MHz in the 2500 MHz band covering 12 circles.

It also recommended Rs 960 crore per MHz for unpaired spectrum in the 2300 MHz band on a pan-Indian basis.

• Rs 38,000 cr Budgetary allocation sought by DoT in 2018-19
• Rs 30,000 cr Revised allocation for DoT in 2018-19
• Rs 44,000 cr DoT expects to earn through auctions in 2019-20