Government expects Rs 41,519 crore revenue from telecom sector in 2019-20

In a huge sigh of relief to middle-class, Modi govt has announced big changes in income tax slab. Govt has approved for small and marginal farmers with land of up to 2 hectares, says Piyush Goyal.

The government expects marginal growth in revenue from telecom sector at Rs 41,519.76 crore in 2019-20, as per data published in the budget document. The collection for the current fiscal is expected to fell short of Rs 9,416.42 crore at Rs 39,245 crore from the budgeted provision of Rs 48,661.42 crore. According to data published by the Telecom Regulatory Authority of India (Trai) for July-September 2018, the gross revenue of telecom service providers dipped by 12.86 per cent to Rs 57,827.24 from Rs 66,361.7 crore and adjusted gross revenue (AGR) by 13.26 per cent to Rs 36,142.44 crore from Rs 41,668.84 crore on year-on-year basis.

Revenue from the sector though has been falling over the last two years due to severe financial pressures faced by India’s mobile phone operators owing to the ongoing price war, which has meant lower license fees and SUC for the government. The price war has led to rapid consolidation of the industry which has now shrunk to three private sector players – India’s older telcos Bharti Airtel and Vodafone Idea, and latest entrant Reliance Jio – from over eight about two years back.

In 2017-18, the government’s revenue mop-up from the telecom sector fell by about 22 percent, owing to a decline in earnings of service providers from sale of services. Bharti Airtel and Vodafone Idea, under aegis of COAI, have approached the government for deferment of spectrum payments by 2 years. The revenue provision from the telecom sector indicates that the government has not made collection estimates from spectrum auction that is being planned to be held in second half of 2019.The TRAI has recommended auction of about 8,644 MHz of telecom frequencies at an estimated total base price of Rs 4.9 lakh crore, which includes radio-waves for 5G services.