The Fiscal Bill 2009-10 has estimated that the government would earn revenue of Rs 35,000 crore from the auction of 3G spectrum, that will provide third generation technology services which are voice data and video enabled.
The total receipt from telecom services is estimated to be Rs 48,335 crore.
This includes revenues from the annual licence fee that the telecom operators have to pay to the government and the fee for usage of 2G spectrum by the existing mobile telecom service providers.
Earlier, the telecom and the finance ministry had agreed on a reserve price of Rs 4,040 crore for auction of pan-India 3G spectrum.
The officials of the department of telecommunications (DoT) had also indicated that about five blocks of spectrum would be up for auction. Nothing has, however, been finalised.
The government has already allotted spectrum to the government-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) on the condition that they would pay the price arrived through auction.
Therefore, there would be six operators (MTNL and BSNL are taken as one pan-India operator as MTNL provides services in Delhi and Mumbai, while BSNL offers services in rest of the country) paying Rs 35,000 each, if the bidding goes as per the budget estimates.
This implies that the government is expecting to arrive at a price of about Rs 5,833 crore for pan-India spectrum.
If the government puts six blocks of spectrum for auction, then the bidding price should be about Rs 5,000 crore to meet the budget estimates.
“Reserve price for 3G should be low as India is starved of broadband and the only way it can be delivered is through 3G,” said T V Ramachandran, director general of cellular operators association of India (COAI). “A higher reserve price is going to harm customers.”