The government expects to raise about Rs. 40,000 crore in the financial year ending March 2013 through sale of spectrum and fees that incumbent telecom service providers such as Bharti Airtel, Vodaofne and Idea will be required to pay for the additional spectrum they own.
The government plans to auction two category of licences - one, spectrum vacated by 122 licences in view of the Supreme Court order dated February 2. The order cancelled all the licences issued on or after January 10, 2008, by the former communications minister A Raja.
Two, auction of broadband wireless access (BWA) spectrum that is currently allotted to the PSUs Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL).
The two PSUs were allotted spectrum before 2010, before the BWA auctions were held. However, the two companies have offered to return the BWA spectrum as it has put a lot of burden on them. The government has accepted their demands.
The incumbent operators like Bharti Airtel, Vodafone and Idea own more than 6.2 MHz of spectrum in a number of circles. Under the telecom licences, there is no provision for allotting more than 6.2 MHz of spectrum to an operator. So, these companies will have to pay at the market rate for the excess spectrum.
The government has provisioned Rs. 58,217.3 crore under other communications services. About Rs. 17,000 crore out of it will be from the annual licence fee and the rest will be from the spectrum sale.
"The government can easily achieve its target of sale of spectrum," said BK Syngal, former CMD, VSNL (now Tata Comm).