Govt to miss revenue target from telcos: ICRA

ICRA added, however, sector will however contribute to the tune of Rs 5-6 lakh crore over period of next 10 years

Government may miss revenue target of Rs 98,995 crore from telecom services budgeted for the current financial year, credit rating agency ICRA said on Tuesday.

The sector will however contribute to the tune of Rs 5-6 lakh crore over period of next 10 years, it said.

"According to the budget estimates for financial year (FY) 2017, receipts from telecommunications are expected at Rs 98,995 crore. However, ICRA expects it to be lower. Over longer term, the telecom industry would contribute at least Rs 55,000-60,000 crore to the non-tax revenue receipts of the Government of India for each of the next 10 years," Vice President of Corporate Ratings for ICRA Limited, Harsh Jagnani said in a statement.

According to Jagnani, the long term contribution estimates excludes any cash-flows from other levies and assuming no change in spectrum usage charge calculations.

Telecom sector has contributed around Rs 3 lakh crore to the non-tax revenues of the government over the last seven years, amounting to 24 per cent of the total non-tax revenue receipts, the statement said.

"Out of the Rs 3 lakh crore contribution, the licence fees has contributed Rs 84,000 crore, growing at CAGR (compound annual growth rate) of 6 per cent while the spectrum usage charge has contributed Rs 38,000 crore, growing at 12 per cent per annum," Jagnani said.

Though spectrum auctions have not been a regular feature, nevertheless they have contributed Rs 1.59 lakh crore over the last seven years, he said.

Overall, the communication sector has contributed at the least 14 per cent to the non tax revenues of the government each year, the statement said.

The upcoming mega-spectrum auction in which government plans to sell usage rights of radiowaves worth Rs 5.66 lakh crore will increase non-tax revenue in the ongoing financial year, it said.

Government expects to get about Rs 64,000 crore upfront from sales of radiowaves.