How is FM likely to achieve Rs 40,847 crores spectrum target?

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Despite Association of Unified Telecom Service Providers of India’s (AUSPI) press release that the spectrum allocation target of Rs 40,847 crore made by the Finance Minister in the Union Budget 2013 is not a credible number, P Chidambaram is confident of achieving it.

Finance Minister, P Chidambaram reiterated that the spectrum target includes one time fee, revenue share for the licenses, spectrum usage charges and payments by the compnies during the bidding of the licenses two months ago. “I have got a statement signed by the department of telecom (DoT) listing the components of that Rs 40,000 crore number. Apart from one time fee, revenue share for the licenses, it also includes payments that the companies had to make during the bidding of the licenses two months ago.”

“The new licenses are under litigation, but why does one assume that litigation means delayed payment? If the litigation quickly travels up to the highest court it is quite possible the payment may be accelerated,” adds FM.

AUSPI says the number is not credible because there is a litigation risk as far as one time spectrum fee is concerned, plus there are no takers for the 900 Mhz spectrum at this point in time.

The Budget for 2013-14 expects a revenue of Rs 40,847 crore from spectrum and other fee. For the current financial year, government has lowered estimated spectrum revenue to Rs 19,440.67 crore from the budget estimates of Rs 58,217 crore.

The second round of spectrum auction is scheduled to start from March 11. So far the government has received only one application from Sistema Shyam Teleservices for participating in spectrum auction.

DoT has also announced that it will conduct third round of auction but dates and other final details have not been released yet.