1. Budget 2016: Spectrum sale target – Will wait and watch, says Ravi Shankar Prasad

Budget 2016: Spectrum sale target – Will wait and watch, says Ravi Shankar Prasad

Telecom minister Ravi Shankar Prasad on Tuesday said the government would “wait and watch” the developments of the next round of spectrum auctions, even as the Budget...

By: | New Delhi | Published: March 2, 2016 1:26 AM

Telecom minister Ravi Shankar Prasad on Tuesday said the government would “wait and watch” the developments of the next round of spectrum auctions, even as the Budget has set a target of realising a mammoth Rs 98,994.93 crore from spectrum sale planned during May-June.

Refraining from commenting if the target was exaggerated, the minister said, “We have to wait and see. Revenues have to come through different sources (like spectrum fee, licence fee, one-time spectrum charges, initial spectrum payments for the airwaves won in the upcoming auction by telcos amongst others).”

FE had reported on Monday that spectrum receipts are likely to fall short of the targeted Rs 98,994.93 crore, because the auctions for the 700 Mhz band aren’t likely to be successful, given that the recommended reserve price is very high at R11,485 crore per MHz. Companies such as Bharti Airtel and Vodafone have said that they are unlikely to bid for it. If the auction of 700 MHz band doesn’t go off well, the receipts could be somewhere in the region of Rs 71,000 crore, by auctioning spectrum in the 2100 MHz and 2300 MHz bands.
Telcos typically pay 30% of the amount upfront — which would amount to Rs 21,000 crore in FY17. Add to this another R10,000 crore, which is the next instalment of the deferred payment for the auction held in 2014, and another R25,000 crore from annual licence fee and spectrum usage charge. This works out to around R56,000 crore, more or less the amount mopped up in FY16, R56,034 crore.

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