Govt could miss spectrum revenue target of Rs 45,000 crore

The government is likely to miss the Budgetary target of Rs 45,000 crore it expects to raise from the February 2015 spectrum auctions and licence fees as the Department of Telecommunications (DoT) has said that it would not be able to put on the block 2,100 MHz (3G) and 700 MHz bands.

According to DoT, the defence ministry is not ready to vacate these spectrum bands. The 700 MHz band is the most efficient spectrum, which was earlier earmarked for Prasar Bharti for exclusive spectrum availability to All India Radio, Doordarshan and other communication under the control of the government.

According to a memorandum of understanding between the defence ministry and DoT, the former was to free 65MHz in 1,800 and 2,100 MHz bands for commercial use.

In return, DoT was had to complete the laying of an optical fibre network that is already two years behind schedule. "Discussion is on with defence. TC (Telecom Commission) has decided to focus on spectrum for auction that is coming up for renewal," a DoT official told news agency PTI.

Most of the spectrum which is proposed to be put up for sale is being used by Bharti Airtel, Vodafone India, Idea Cellular and Reliance Communications across various parts of the country.

These companies will need to buy back radio waves to continue operations in areas where their licences will expire in 2015-16. The government has already earmarked a budget target of Rs 45,000 crore against spectrum auction and license fees.

While Rs 18,000 crore will come via license fees and spectrum charges, the government expects Rs 27,000 crore from the next auction. On the other hand, the Commission, the highest decision-making body of DoT, has asked the Telecom Regulatory Authority of India (Trai) to review its recommendations on spectrum valuation and pricing of 1,800 MHz, 900 MHz and 800 MHz and that some of the suggestions cannot be implemented.

Trai last month gave recommendations on valuation and pricing of 1,800 MHz and 900 MHz bands, used for 2G services, for the auctions. The regulator had suggested about 10-per cent higher price for spectrum in 1,800 Mhz over the final bid price that was received in the February auctions.

The government had earlier expected auction of 3G spectrum to fetch, at least, Rs 50,000 crore for 15 MHz, as per the 2010 auction price, of which Rs 17,000 crore could come during this fiscal.

The government had earlier expected to garner Rs 10,000 crore from sale of airwaves in the 1,800 MHz, 900 MHz and 800 MHz bands assuming that winners pay only 30 per cent of the bid amount up front.