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Budget 2026: Telecom sector's FY27 revenue expected to be ₹1.17 trillion

Budget estimates project telecom sector revenues at ₹1.17 trillion in FY27, lower than revised FY26 levels, reflecting spectrum equity conversions and capped AGR payments despite expected auction and

Telecom players have claimed that D2M broadcasting has direct implications for spectrum bands earmarked for current and future 5G use

Revenues from the telecom sector mainly come from licence fees paid by telecom operators and receipts on account of spectrum usage charges collected by the Department of Telecommunications

BS Reporter New Delhi

2 min read Last Updated : Feb 01 2026 | 4:33 PM IST

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The government is expecting revenues of ₹1.17 trillion from the telecom sector in 2026-27 (FY26), over 16 per cent lower than the ₹1.4 trillion under revised estimates (RE) for FY26. The FY26 RE, however, is about 42 per cent higher than the ₹82,442 crore projected in the Union Budget for FY26.

According to details in the non-tax revenue proceeds, ₹1.77 trillion in the RE for FY26 was reduced by ₹36,950 crore — the amount corresponding to Vodafone Idea’s (Vi’s) spectrum auction dues which the government converted into equity in 2025, taking its total ownership in the debt-laden telecom service provider to 48.9 per cent and becoming its single largest shareholder.

Proceeds of ₹1.17 trillion are likely to include income from spectrum auctions expected in 2026, besides licence fee, said sector experts, noting that these revenue streams alone would not be adequate for the government to achieve this target, considering that the government was already re-estimating Vi’s adjusted gross revenue (AGR) dues and the payments from the carrier were capped for the next 10 years.

Revenues from the telecom sector mainly come from licence fees from telecom operators and receipts on account of spectrum usage charges collected by the department of telecommunications. All telecom service providers pay a licence fee of 8 per cent on AGR, which includes about 3 per cent spectrum usage charges and a 5 per cent levy under Digital Bharat Nidhi (DBN), formerly known as the Universal Services Obligation Fund. DBN comes into effect when the government funds the setting up of telecom infrastructure like towers by private operators in rural or remote areas. Spectrum usage charges are levied on private operators for using spectrum, depending upon the amount assigned for their network.