Telecom department forecasts 70 per cent shortfall in revenues from communications

New Delhi: The government is set to face a 70 per cent shortfall in revenue from communications, with the telecom department internally pegging collections at about Rs 40,000 crore in this financial year against Rs 1.33 lakh crore estimated in the budget, further straining the Centre’s finances.“At this point of time, we expect about Rs 10,000 crore as upfront payment for sale of airwaves and up to Rs 15,000 crore as licence fee and spectrum usage charges,” a senior government official told ET.Proceeds from adjusted gross revenue (AGR) of telcos could be about Rs 15,000 crore at best, even if the Supreme Court orders the payments to be made over 10 years instead of 15 or 20 years, as sought by the companies and the Department of Telecommunications, respectively, the official added.The government won’t get payments from spectrum auctioned earlier because stressed telcos were granted a two-year moratorium to ease strain on cash flow.DoT’s latest internal estimates appear much lower than its calculations submitted to the finance ministry while preparing for Budget 2021, officials said. “That estimate was obviously rejected by the finance ministry,” another official said. “It is possible the ministry included AGR dues.”However, former department of economic affairs secretary Atanu Chakraborty had categorically stated at the time that the estimate didn’t include AGR payments, befuddling experts on the math behind the Rs 1.33 lakh crore budget estimate. The government’s estimate was an over two-fold increase from the year before.“Receipts under ‘other communication services’ mainly relate to licence fees from operators and... spectrum usage charges,” according to the budget document.It also revised its estimate for 2019-20 to Rs 58,686.64 crore against Rs 50,519.8 budgeted for communications.“Telcos paid a substantial amount of their AGR dues in the last quarter of the previous financial year and that helped revise estimates,” the second official explained. Bharti Airtel paid Rs 18,004 crore, Vodafone Idea Rs 6,854 crore and Tata Teleservices Rs 4,197 crore in the last quarter of 2019-20.As reported earlier by ET, analysts estimate the government will get less than Rs 13,000 crore annually from AGR dues of Bharti Airtel, Vodafone Idea and Tata Teleservices, even if the apex court allows them to paid over 10 years.Additionally, the government has pushed a planned sale of 5G spectrum to next year, although auction of 4G airwaves worth over Rs 4 lakh crore is likely in October.“The auctions this year will generate a very tepid response and will mostly be about winning the airwaves back for the telcos,” said Prashant Singhal, TMT emerging markets leader at EY.Reliance Jio needs to buy Reliance Communications’ spectrum permits that will expire in 18 circles in July-August 2021. Jio uses these premium 4G airwaves via a spectrum- sharing pact with RCom.Airtel is expected to bid for spectrum over which it will lose rights in some markets by next year and selectively load up on 4G airwaves in urban circles, analysts said.Permits of Vodafone Idea in eight circles are set to expire in 2021, but the company has adequate backup airwaves following the merger of Vodafone India and Idea Cellular, analysts added.