Telecom: Govt expects to double revenues from license fees, spectrum

According to COAI estimates telcos pay around Rs 16,000 to Rs 17,000 crore as license fee and SUC annually

The government’s plan to double its revenues from “other communication services” has  raised apprehensions among telecom operators that they may have to pay a substantial portion of the AGR dues — over 50 per cent of Rs 1.44 trillion — next fiscal year.

The other communication services include payment of licence fee, spectrum user charges (SUC) and payment for spectrum.

The government has budgeted that “other communications services” revenues will go up from Rs 58,989.64 crore in the Revised Estimates for 2019-20 to Rs 1.33 trillion for fiscal 2020-21 (FY21).    

According to Cellular Operators Association of India (COAI) estimates, telcos pay around Rs 16,000 to Rs 17,000 crore as licence fee and SUC annually (this year). Even assuming that revenues grow sharply due to increase in tariffs and redefinition of adjusted gross revenue (AGR), they say it cannot be more than Rs 30,000 crore for FY21. But with a moratorium of two years on payment of deferred spectrum for FY21, which is around Rs 25,000 crore, this money will not be available.

Also with negative response on  5G, COAI expects the government to get Rs 25,000 crore upfront for fresh spectrum auction next year.

Telcos and non-telcos (which have contested the Supreme Court ruling on AGR) together have to fork out around Rs 3.64 trillion as AGR dues. So, if the target has to be met, telcos and non-telcos will have to pay over 21 per cent of their total AGR dues next year. If it is only telcos, it means they’ll have to pay more than half of the dues next year.