Budget 2024 retains Rs 1.2 trillion telecom revenue goal for FY25

Despite muted spectrum auctions, non-tax telecom revenue for FY25 higher by 28.5%

The government has kept its estimate of non-tax revenue from the telecom sector in FY25 (2024-25) at Rs 1.2 trillion, the same as what it had estimated in the preceding interim budget presented in February. However, this is 28.5 per cent higher than the Rs 93,541 crore non-tax revenue collection estimates listed by the government in the revised estimates of FY24 (2023-24).

The unchanged figure for FY25 is despite the latest round of 5G spectrum auction held in June, netting the government Rs 11,340.8 crore. As compared to this, the Centre had kept a reserve price of Rs 96,317.65 crore for the 10,523.15 MHz worth of spectrum put to auction.

In the first 5G auctions in 2022, the Centre had sold Rs 1.5 trillion worth of spectrum. But this time, a tepid response from telecom operators resulted in bidding ending on the second day after just seven rounds.

Meanwhile, the next auctions are not expected in the current financial year (FY25), given that the government has committed to holding auctions on an annual basis, officials at the Department of Telecommunications (DoT) said.

Higher operator payments

Higher incidence of payments by telecom operators is expected to drive the revenue estimates for FY25, officials said. "A larger proportion of deferred payments was received by the government in FY24, and the same is expected in FY25," a DoT official said.

The government's estimate of non-tax revenue collections from the telecom sector mainly relates to the license fees from telecom operators and receipts on account of spectrum usage charges. The DoT collects recurring licence fees from operators, calculated at 8 per cent of the Adjusted Gross Revenue (AGR) of licensed operators. The collection of licence fees depends on the rate of license fee, tariff, and growth of the telecom service sector in the country.

The collections also include spectrum usage charges (SUC) levied on operators for spectrum acquired before September 15, 2021. This is calculated at a flat 3 per cent of AGR.

Due to changes in payment plans for spectrum, the government now receives lower SUC. At the 2022 5G auctions, while Bharti Airtel had chosen the option to pay a higher upfront amount, the other three companies—Reliance Jio, Vodafone Idea, and first-time bidder Adani Data Networks—had opted for 20 equal annual instalments.

Meanwhile, telecom payments collated together, not counting advance payments by telcos, amounted to around Rs 55,000 crore in FY24, officials had said earlier.

Non-tax revenue collection estimate from Telecom

	2019-20	2020-21	2021-22	2022-23	2023-24	2024-25	2024-25
	Actual FY20	Actual FY21	Actual FY22	Actual FY23	Revised Estimate FY24	Interim Budget FY25	Budget FY25
Rs (Cr)	69,486	45,500	85,828	64,835	93,541	120,267	120,267

Source: Receipt Budget 2024-25