The Modi government is hoping old spectrum dues will fill up its coffers substantially to enable the technology upgrade of BSNL.

Non-tax revenues from telecom for the fiscal have been set at ₹1.2 trillion, with just ₹11,340 crore to come from the sale of spectrum last month and the rest from unpaid dues plus recurring payments in licence and spectrum fees.

The government has earmarked ₹82,916 crore for BSNL.

Officials attribute their confidence in meeting the target to an expected increase in recurring payments from telecom operators.

“A larger proportion of deferred payments was received by the government in 2023-24, and the same is expected in 2024-25,” said a Department of Telecommunications (DoT) official.

Non-tax revenue from the telecom sector primarily consists of licence fees and spectrum usage charges. License fees, calculated at 8 per cent of Adjusted Gross Revenue (AGR), are a steady source of income. Their collection depends on the fee rate, tariffs and overall growth in the sector.

The budget proposes a total allocation of ₹1.28 lakh crore for telecom projects and public sector firms under the telecom ministry, with the bulk earmarked for BSNL.

Over ₹1 lakh crore is dedicated to BSNL and Mahanagar Telephone Nigam Limited (MTNL).

A sum of ₹17,000cr will be utilised from the Universal Services Obligation Fund.

Experts believe the capital expenditure for BSNL could involve allocating 4G and 5G spectrum to the state-owned telco. BSNL plays a crucial role in providing services in remote areas where private operators are often absent.

Finance Secretary T.V. Somanathan acknowledged the non-commercial nature of the government’s investment in BSNL, citing its importance in underserved regions. Notably, BSNL has accumulated losses exceeding ₹43,455 crore over the past five years.

Lack of 4G services has weighed heavily on BSNL which has lost 18 million subscribers in the fiscal year 2024.