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Govt hopes to garner Rs 40,000 cr from spectrum sale
TT Correspondent |  |  01 Mar 2013

There is sharp contrast between the expectations of government of generating a revenue of Rs 19,440.67 crore from spectrum sale and other related charges in 2012-13 and Rs 58,217 crore, if one goes by the budget estimates.

As for the financial year 2013-14, government is looking to generate a revenue of Rs 40,847.05 crore from other communication services,

In the 2G spectrum auction held in November, the government got a tepid response garnering only Rs 9,407.64 crore against which was very low conserving the reserve price.

According to the budget document document Receipts under other Communication Services' 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.

As for the financial year 2013-14, government is looking to generate a revenue of Rs 40,847.05 crore from other communication services,

“The track record of the auctions so far has been disappointing, to say the least. The 800 MHz auctions will yield Rs. 5,000 crore or so, and after adjusting the price of cancelled licences and the amortisation facility, the actual inflows will be well below that,” said Ashok Sud, Secretary General, Association of Unified Telecom Service Providers of India.

Mohammad Chowdhury, Leader Telecom, PwC India said, “"Of the 40,000 Crore INR revenue expectation from the industry, we feel confident that at least 20,000 Crore INR can be expected from licence fees, and it is conceivable that the Government could raise around INR 10,000 Crore from spectrum extensions and renewals.  However, we are unclear as to how much could be raised from auctions of fresh blocks of spectrum, so in our view around INR 10,000 Crore of the Government's revenue objectives may be at risk."

This includes receipt from spectrum sale, according to the Budget proposals presented by Finance Minister P Chidambaram today.

T M Ramakrishnan, CEO-Devices, S Mobility Ltd on the same.

“The handsets industry is facing difficult times with increased competition and price wars at large. With the proposed increase in tax for handsets above Rs.2,000, we do not see a decrease in demand but definitely, there will be pressure on the margins. This decision will surely impact the industry’s focus on making smartphones more affordable. At the same time, rural areas might get that much more difficult for smartphones to penetrate.”

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