Government kitty swells $15 bn as telcos pay for 3G spectrum

New Delhi, May 31 (IANS) The Indian government added Rs.67,718.95 crore ($15 billion) to its kitty Monday with all the nine telecom companies, including state-run MTNL and BSNL, making ‘full’ payment to the exchequer for spectrum for third-generation (3G) telecom services.

‘The seven private telecom companies have already made their payments. No company asked for extension and relaxation. BSNL and MTNL have also made full payments as per the deadline of today (May 31),’ a senior official of the Department of Telecommunications (DoT) told IANS.

Nine companies — Bharti Airtel, Reliance Communications, Vodafone Essar, Idea Cellular, Tata Teleservices, Aircel, Etisalat, S Tel and Videocon Telecommunications — participated in the 3G spectrum auction which concluded May 19.

Etisalat and Videocon could not win a single circle in the auction.

Seventy-one slots were put on the block for 22 circles across India for 3G services that will facilitate faster connectivity and applications such as Internet TV, video-on-demand, audio-video calls and high-speed data exchange.

India’s leading telecom operator Bharti Airtel, which won 3G spectrum in 13 circles, paid Rs.12,295.46 crore ($2.73 billion) to DoT. Earlier in the day, an Aircel official told IANS that the company had paid Rs.6,499.46 crore ($1.44 billion) for 3G spectrum in 13 circles on Friday (May 28).

Anil Ambani-led Reliance Communications (RCom) paid Rs.8,585.04 crore ($1.91 billion) towards spectrum fees to the government to start 3G telecom services in 13 circles.

The amount paid by these three private companies is a little over 40 percent of the total of Rs.67,718.95 crore ($15 billion) that the government received.

Vodafone Essar, which won spectrum in nine circles, paid Rs.11,617 crore. Idea Cellular, Tata Teleservices and S Tel also made payments.

These companies can start offering 3G services on a commercial basis from Sep 1.

State-run telecom firms Mahanagar Telephone Nigam Limited (MTNL) and Bharat Sanchar Nigam Ltd (BSNL), which have already been issued airwaves for 3G services, paid the government spectrum fee based on the winner’s price for the circles where these companies operate.

While MTNL had to shell out Rs.6,564 crore for Delhi and Mumbai, BSNL paid the government Rs.10,186.6 crore for the rest of the circles.

The revenue generated from 3G spectrum auction will reduce the government’s fiscal deficit and ‘provide elbow room to return to the fiscal consolidation path,’ Finance Minister Pranab Mukherjee Mukherjee had said last week.

The amount can prune the government’s fiscal deficit, pegged at Rs.381,408 crore (around $85 billion) for this year, by nearly one percentage point and lower the estimated government borrowings from Rs.457,000 crore to Rs.422,000 crore.

The government had hoped to collect Rs.35,000 crore ($7.75 billion) from the auctions for both the 3G services and broadband. But the 3G auction alone fetched the exchequer Rs.67,718.95 crore ($15 billion).

The auction for broadband wireless access (BWA) spectrum kicked off last week, with the potential to fetch another $7.5 billion to the government.