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Government targets about Rs 40,000 cr from telecom spectrum auction

Markets will look to consolidate in the week ahead after most event risks like monetary policy and budget now over.

Shinzo Nakanishi, Managing Director, Maruti Suzuki India
Shinzo Nakanishi, Managing Director, Maruti Suzuki India

The finance ministry has projected revenue of Rs 400 billion (Rs 40,000 crore) from upcoming auctions of mobile radio spectrum during the year to March 2013, the annual budget presented in parliament on Friday showed.

India will auction 2G mobile radio spectrum after the Supreme Court last month ordered cancellation of all 122 telecoms licences and bundled 2G radio spectrum awarded in a scandal-tainted 2008 sale and asked the government to redistribute them through an open auction.

The government is also planning to auction 4G broadband spectrum after state-run telecom Bharat Sanchar Nigam Ltd offered to return wireless broadband spectrum in several telecoms zones. There is also a plan to auction 4G spectrum in the 700 mega hertz band.

India raised more than $21 billion in 2010 from auctions of 3G and 4G radio spectrum, helping it contain its fiscal deficit.

The finance ministry is eyeing a total Rs 582.17 billion from the telecoms sector during the 2012/13 fiscal year, the budget document showed.

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, the budget document said.

For the current fiscal year, the government had initially targeted revenue of Rs 296.48 billion from the telecoms sector, but revised it down to Rs 165.51 billion as a planned broadband spectrum auction did not happen.

Copyright @Thomson Reuters 2012