Bharat Sanchar Nigam Limited (BSNL) is expected to help the government reach a telecom receipts target of around Rs 900 billion for the fiscal year 2023-24 (FY24), through non-cash receipts of Rs 400 billion from the telco for 4G/5G spectrum allotment. The Department of Telecommunications (DoT) has met FY23 communication receipts target of about Rs 690 billion by showing notional gains from 4G spectrum allotment to BSNL.
However, spectrum allotment to BSNL is treated as non-cash receipts as the telco will not pay the government in cash but offer equity in lieu of the spectrum.
For FY24, DoT’s actual receipts is expected to be Rs 500 billion. This includes around Rs 230 billion from licence fee from the operators, Rs 400 billion from the previous spectrum usage charges (SUC), and the remaining Rs 230 billion includes second instalment for 4G/5G spectrum bought by operators in 2022 auctions, and instalments of earlier spectrum auctions. The remaining Rs 400 billion will come from spectrum allotment to BSNL in the current FY-ending March 2024.
Further, BSNL spectrum allotment will work in the way that there will be two entries in the books of accounts by the government, one will be shown as expense as equity into BSNL and the other as inflow for the DoT towards spectrum allocation.
The DoT has pegged the instalment from the upcoming spectrum allotment at Rs 5 billion, for FY24. This is because telcos, Bharti Airtel and Vodafone Idea Limited (Vi), will largely buy spectrum for which their licence is getting expired in February 2024. The value of the spectrum getting expired is only Rs 60-70 billion, 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.
Furthermore, for FY25 as well, DoT’s actual receipts are expected to be around Rs 500 billion, excluding the remaining amount towards spectrum-related adjustments from BSNL.
