Govt revenue to fall as Jio leaves telecom firms fighting for life

The Government’s mop-ups in form of licence fee and spectrum usage charges are likely to fall further as the gross revenue of all telecom firms, except Reliance Jio, has declined significantly.

As per data released by telecom watchdog Telecom Regulatory Authority of India (TRAI), the telecom sector’s gross revenue fell by 8.56 per cent to Rs 2.55 lakh crore in 2017 from Rs 2.79 lakh crore in 2016.

As per the report, total collections for the Government from licence fee came down by 18.78 per cent in 2017, while revenue from spectrum usage charges plunged by 32.81 per cent.

“We expect a further dip in both spectrum usage charges and licence fees in the future because of many factors. Declining trend of subscribers is one of the main reasons.

Besides, the number of service providers are also gradually declining year on year too,” a senior Government functionary told The Pioneer without disclosing his identity.

In fact, there were 13 mobile service providers operational in 2016 which reduced to 12 in 2017 with Videocon closing down its mobile services business. By the end of 2017, Reliance Communications (RCom), Sistema Shyam that merged with RCom and Quadrant closed their operations.

The report, however, showed that there was a decline in telecom firms’ revenue despite increase in subscriber base in some of telecom firms. “The number of telephone subscribers in India increased from 1,151.78 million at the end of December 2016 to 1,190.67 million at the end of December 2017, registering a yearly growth rate of 3.38 per cent,” it said.

The adjusted gross revenue (AGR), earned by service providers from sale of telecom services, declined by 18.87 per cent to Rs 1.6 lakh crore at the end of 2017 from Rs 1.98 lakh crore at the end of 2016, as per data published by the TRAI in its annual performance indicator report.

The licence fee (LF) and spectrum usage charges (SUC) are levied on AGR. The LF declined by about Rs 3,000 crore to Rs 12,976 crore at the end of 2017 from Rs 15,975 crore the Government collected a year ago. The SUC collection declined by Rs 2,485 crore to Rs 5,089 crore from Rs 7,574 crore during the period under revenue.

The AGR revenue chart showed that only Reliance Jio registered growth while all other players in the sector posted loss in revenues. “AGR of telecom major Bharti Airtel declined by 24.46 per cent to Rs 36,922 crore from Rs 48,880 crore,” said the chart.