Union Budget 2020: Even as the fate of the telecom industry hangs in balance, the government increased the revenue estimate from the sector by over two times to Rs 1.33 lakh crore for 2020-21, primarily on account of payments related to adjusted gross revenue (AGR) dues as well as the coming spectrum auctions.

The government has revised upwards the estimated receipts from the communications sector in the current fiscal to Rs 58,989.64 crore from the earlier budgeted Rs 50,519.81 crore, as some amount of upfront payment is expected in the current fiscal in case the Supreme Court grants relief in payments timeline. The SC is expected to take up modification pleas of telecom operators Bharti Airtel, Vodafone Idea and Tata Teleservices next week.

The three operators alone account for around Rs 1.02 lakh crore as AGR dues. Overall, the telecom industry is saddled with dues amounting to Rs 1.47 lakh crore.

Telcos also owe the government Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges.

COAI D-G Rajan Mathews said, looking at the headline numbers, it seems like the relief on AGR dues on licence fee and spectrum usage charges sought by the industry has not materialised. “Rather it appears to have gone in the opposite direction. From the aggregate amount given, it is difficult to determine the component amounts and the increases expected in each category,” he said.

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COAI said an increase in expected revenue from the telecom sector can be explained by increases from four categories — repayment of previous spectrum debt, licence fee and spectrum usage charges on continuing AGR revenue, proceeds from planned new spectrum auctions and now the new item of expected revenues from the SC mandated AGR dues.

The government has already announced a two-year moratorium for deferred spectrum payments, which means operators won’t be paying for instalments for spectrum bought in earlier auctions for the coming two next fiscals.

“Despite deferral of spectrum payments due in FY21 and FY22, the higher budget estimate for FY21 can be attributable to some participation in 5G spectrum auctions and expectation of payments of AGR-related dues,” Ankit Jain, assistant vice-president, corporate ratings, Icra said.

DoT is working to conduct spectrum auction in April-May this year. The Digital Communications Commission, the highest decision-making body of DoT, has already cleared the pricing and other details for the upcoming sale of airwaves worth Rs 5.22 lakh crore.

“The budget factors 2.5-fold increase in communication services receipt for this fiscal at Rs 1.33 trillion which point towards realisation of certain past AGR dues and proceeds from 5G spectrum auction. Tariff reset, certain relief on the AGR judgment and a clear policy roadmap is eminent for the industry to be viable and help meet budget estimates,” Prashant Singhal, emerging markets TMT leader, EY said.