A parliamentary panel has told the Department of Telecommunications (DoT) to adopt a sweeping strategy to diversify its income sources — faced with slowing revenue growth in the sector.

It has recommended targeted measures such as monetising data services, expanding into satellite broadband and leveraging technologies such as 5G and the Internet of Things (IoT) to stabilise government earnings.

The parliamentary panel has also proposed phasing out moratoriums on AGR and spectrum dues and setting clear timelines for payments.

The proposals, outlined by the Parliamentary Standing Committee on Communications and Information Technology, aim to reduce the government’s reliance on unpredictable spectrum auctions.

The committee also suggested revising spectrum usage charges (SUC) to make them more consistent and exploring the monetisation of infrastructure assets such as telecom towers.

The urgency for reform stems from projections that show revenue receipts for 2024-25 will reach ₹1.1 lakh crore, a modest increase from ₹90,659 crore in 2023-24 but far below the rapid growth seen in earlier years.

Market saturation, regulatory changes and financial distress among major telecom operators are key factors in this slowdown.

The financial strain on telecom operators is palpable. Many are grappling with debt restructuring, and some have delayed payments for adjusted gross revenue (AGR) dues and spectrum instalments. These deferrals, while easing pressures on the industry, have reduced immediate revenue flows to the government.

Revenue from spectrum auctions, a cornerstone of the DoT’s income, has been erratic. In 2020-21, auctions brought in ₹21,918 crore, while 2024-25 is projected to yield ₹80,766 crore — a substantial but inconsistent source of funding. Such fluctuations have raised concerns about the government’s dependence on one-time auctions, particularly in years when demand softens or supply is constrained.

It emphasised the importance of strict monitoring mechanisms to ensure deferred payments of telecom operators do not undermine future revenues.

The committee recommended aligning auction timelines with market demand.