Loss-making BSNL to help govt tide over Rs 90K cr telecom receipts target in FY24

After having met FY23 communication receipts target of about Rs 69,000 crore by showing notional gains from 4G spectrum allotment to BSNL, the department of telecommunications (DoT) once again is expected to achieve an even higher target of around Rs 90,000 crore for FY24, through non-cash receipts of Rs 40,000 crore from BSNL for 4G/5G spectrum allotment.

Spectrum allotment to BSNL can be treated as non-cash receipts as the state-owned telecom operator will not pay the government in cash but offer equity in lieu of the spectrum. 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 FY24, DoT’s actual receipts is expected to be Rs 50,000 crore. This includes around Rs 23,000 crore from licence fee from the operators, Rs 4,000 crore from the previous spectrum usage charges, and the remaining Rs 23,000 crore includes second instalment for 4G/5G spectrum bought by operators in 2022 auctions, and instalments of earlier spectrum auctions, sources said.

The remaining Rs 40,000 crore will come from spectrum allotment to BSNL in the current financial year ending March. In June last year, the government approved the third revival package for BSNL with the total outlay of Rs 89,047 crore, which was the cost of 4G/5G spectrum allotted to the state-owned telecom operator.

According to analysts, how BSNL spectrum allotment works is that there will be two entry in the books of accounts by the government – one will be shown as expense as equity into BSNL and the other as inflow for DoT towards spectrum allocation.

DoT has pegged the instalment from the upcoming spectrum allotment at only Rs 500 crore, for FY24. This is because telcos – Airtel and Vodafone Idea – will largely buy spectrum for which their licence is getting expired in February. The value of the spectrum getting expired is only Rs 6,000-7,000 crore, for which the yearly instalments will be less. In the interim for a few months, the government is expected to allot the spectrum without auction to the telcos and later it is expected to conduct auction, sources said.

For FY25 as well, DoT’s actual receipts are expected to be around Rs 50,000 crore, excluding the remaining amount towards spectrum-related adjustments from BSNL, according to sources.

For FY23, DoT had revised its revenue target by over 30% to Rs 68,784 crore (including Rs 30,000 crore as BSNL equity infusion for spectrum). However, in actual the telecom department ended up getting only Rs 39,000, which is 26% less than the earlier set target of Rs 52,806 crore.

DoT had actually exceeded the Rs 53,987 target and collected Rs 85,828 crore in FY22 mainly because of pre-payment of spectrum instalments by Bharti Airtel and Reliance Jio. Jio had pre-paid Rs 30,791 crore clearing all dues towards spectrum bought in auctions before March 2021. Similarly, Bharti had paid Rs 24,334 crore to clear deferred liabilities of earlier auctions.