Telecom Lead India: Through 3G and
Broadband Wireless Access (BWA) auctions in 2010, the Indian government had pocketed
a whopping Rs 106,000 crore against a revenue target of Rs 25,000-35,000 crore.
From the next round of auction in 2012-13, the government is targeting Rs
40,000 crore, but will overachieve as the industry is actively looking at bagging
LTE spectrum.
The government had raised Rs 67,719 crore from 3G spectrum
auction, while it received Rs 39,000 crore through BWA auction. But this caused
the entire telecom industry to plunge into huge debt trap. Moreover, 3G and BWA
services are yet to become a strong revenue earner for mobile operators.
There are indications that several operators, who have
received BWA licenses, will not launch TD LTE services in 2012. Two major operators
– Bharti Airtel and Reliance Industries – are looking at select circles.
Qualcomm is trying to get out of legal issues, while Augure, powered by
Ericsson network, will have presence in Madhya Pradesh and Chhattisgarh under
its ZOOSH brand.
The delay in 3G and BWA launches will not prompt operators to
go slow on LTE and 2G spectrum auctions in future. Both will assist established
operators to pick up more subscribers and improve quality of services. ARPU
from LTE services in the long run will assist mobile players to stay ahead of
competition.
During the 2010 auctions, the government had almost doubled
the reserve price for obtaining pan-India spectrum from INR 20.2 billion ($435
million) to INR 35 billion ($753 million). It had also relaxed guidelines
around External Commercial Borrowing to permit ECB up to $500 million to
finance spectrum acquisition fees.
The reserve price for spectrum and sentiments in the mobile industry
will determine the demand for spectrum. The survival of the UPA government is
uncertain at present.
According to media reports, the finance ministry has
projected revenue of Rs 40,000 crore from upcoming auctions of mobile
radio spectrum during the year to March 2013.
India will auction 2G mobile radio spectrum, BSNL’s BWA spectrum
and 4G spectrum in the 700 mega hertz band.
The finance ministry is looking at a total Rs 58,217
crore from the telecoms sector during the 2012-13.
The figure includes the potential receipts from spectrum
auction, other annual fees paid by telecoms companies and also a planned levy
on 2G spectrum holding beyond 6.2 mega hertz by established telecoms companies.
During the current fiscal year, the government had initially
targeted revenue of Rs 29,648 core from the telecoms sector, but
revised it down to Rs 16,551 core as a planned broadband spectrum auction
did not happen.
