Now that the Union Budget is history let’s take a look at what the government got from the telecom sector and what it hopes to raise during the next fiscal (2013-14). During 2012-13, the government had targeted to raise Rs 58,217.33 crore. That included Rs 40,000 crore from the telecom auctions. But, it managed to raise only Rs 19,440.67 crore. After all, there were hardly any bidders for the November auction and the March auction is a flop show anyway.
Despite the issues, during this fiscal, finance minister P Chidambaram has targeted to raise Rs 40,847 crore from the telecom sector.
Explaining it on television, Chidambaram pointed out that the budget estimate during 2012-13 was done without analysis. This time round, he has got the numbers broken down to the last digit and got an assurance from the Department of Telecommunications (DoT). The receipts mainly relate to one-time spectrum charges levied as per the recommendations of TRAI, auction of 1800 MHz and 900 MHz spectrum and receipts from 800 MHz spectrum.
It remains to be seen how successful Chidambaram is considering that there were no bidders last time round. The lone bidder for the March 11 auction is Sistema Shyam Teleservices that is bidding for 800MHz spectrum in some 11 circles.
So what happens to the spectrum that has to be auctioned in the 900MHz and 1800MHz? First the empowered group of ministers (eGoM) is expected to take a decision in this regard. The big question is whether they will cut the base price in the four circles—Delhi, Mumbai, Karnataka and Rajasthan. According to a Goldman Sachs report, the government could raise the amount if it sells all targeted 900/1800MHz spectrum at a reserve price 45 per cent lower than the recently failed auction’s reserve price.
That will put it quite in sync with the discount offered to the 800MHz spectrum. While that will be welcomed by operators’, what has emerged quite clearly is that the finance minister does not need the support of the telecom sector to meet his fiscal deficit target. Maybe that could be a reason to celebrate.
