Government’s telecom income in FY24 would possibly fall quick by way of Rs 10,000 crore – Trade Information

The department of telecommunications’ (DoT) receipts for FY24 will be around Rs 10,000 crore less than the revised budgeted target of Rs 93,541 crore, officials said.

This is because of some payment related adjustments pertaining to state-owned Bharat Sanchar Nigam (BSNL) that will be accounted for in FY25.

Technically, as part of the Rs 1.64 trillion revival package in 2022 and Rs 89,047 crore in 2023, the government will provide spectrum and adjust adjusted gross revenue (AGR) dues of BSNL. According to experts, such adjustments by the government are accounted as non-cash receipts as per which the state-owned telecom operator will not pay it in cash but offer equity in lieu of the spectrum and AGR payments.

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This is very different from actual revenues flowing to the government by private operators such as Jio, Airtel, and Vodafone Idea, who pay licence fee, spectrum usage charges and auction money.

For example, BSNL’s AGR dues upto FY22, were calculated to be Rs 22,521 crore. The government infused Rs 26,983 crore including goods and services tax (GST) for funding of AGR dues and in return BSNL issued equity shares to the government by way of rights issue. The same amount was adjusted in May last year, which would have been shown as receipts by DoT.

In the financial statements for October-December quarter, BSNL said the AGR dues for next 5 years will be settled on same principle. Similar adjustments are being done towards the 4G/5G spectrum allotment to BSNL.

Going by the actual cash receipts of DoT, in FY24, would have been around Rs 60,000 crore. This includes around Rs 20,000 crore from licence fee from the operators, Rs 4,000 crore from the previous spectrum usage charges, Rs 23,000 crore includes second instalment for 4G/5G spectrum bought by operators in 2022 auctions, and prepayments by telcos for past spectrum auctions, officials said.

The telecom receipts are strong given the continuous increase in revenue of telcos owing to higher data consumption, officials said. In FY24, the telecom operators’ AGR has touched Rs 2.37 trillion, a YoY growth of over 8%, according to analysts’ estimates. AGR is the revenue based on which the telcos pay licence fee and spectrum usage charges (SUC) to the government.

Analysts estimate a 13% compound annual growth rate (CAGR) in the adjusted gross revenue (AGR) of telecom operators over the next four years. In FY25, the non-tax receipts for the (DoT) is pegged at Rs 1.2 trillion, against Rs 83,000 crore collected in FY24.

This time too, loss-making BSNL will help DoT to tide over its receipts target.