Telecom sector records revenues worth Rs 3 lakh crore in FY23

The AGR increased to Rs 2.36 lakh crore in 2022-23 from Rs 2.06 lakh crore in 2020-21, which led to an increase in the government's revenue from licence fee collections.

The Indian telecom sector marked a key milestone by posting gross sales of more than Rs 3 lakh crore for the first time in FY23 according to a TOI article. This expansion has been attributed to increased data and content consumption along with the financial relief received through the government's reform package. Introduced in 2021, the telecom rescue package has provided the sector the much-needed financial help. The Indian telecom industry reportedly closed FY23 with gross revenues of Rs 3.1 lakh crore, higher than Rs 2.6 lakh crore in 2021-22.

The government had approved structural and procedural reforms in the telecom sector on 15^th September 2021. These reforms include Rationalization of Adjusted Gross Revenue; Rationalization of Bank Guarantees(BGs); Rationalization of interest rates and removal of penalties; Dispensing with the requirement of BGs (for auctions held henceforth) to secure instalment payments; Increasing spectrum tenure from 20 years to 30 years(in future auctions); Permission for surrender of spectrum after 10 years (in future auctions); Dispensing with the requirement of Spectrum Usage Charge (SUC) for spectrum acquired in future spectrum auctions; Removal of additional SUC of 0.5% for spectrum sharing; Permission for 100% Foreign Direct Investment (FDI) in telecom sector under automatic route subject to safeguards; Fixed time for spectrum auctions (normally in the last quarter of every financial year); Requirement of licenses under 1953 Customs Notification for wireless equipment replaced with self-declaration; Permission for Self-KYC; e-KYC rate revised to only one Rupee; Dispensing with the requirement of fresh KYC for shifting from Prepaid to Post-paid and vice-versa; Replacement of paper Customer Acquisition Forms with digital storage of data; Easing SACFA clearance for telecom towers; and Addressing liquidity requirements of the Telecom Service Providers by way of moratorium/deferment as stated by the Ministry of communications.

Reliance Jio and Bharti Airtel, the top two providers in the market, have driven expansion by profiting from rate increases and increased consumer data usage among other services. Third-biggest private operator Vodafone Idea is still trying to turn things in their favor, specifically since the government took a majority stake by approving the conversion of its outstanding interest liabilities into equity, making the government the largest stakeholder.

State-controlled BSNL and MTNL have alos been having a difficult time reviving, but thanks to the government's massive revival package announcements and a nationwide VRS (Voluntary Retirement Scheme) programme, these businesses are now operating more profitably and efficiently.

The rise in adjusted gross revenues(AGR), which the government bases its levies on, has coincided with the rise in gross receipts. The AGR increased to Rs 2.36 lakh crore in 2022-23 from Rs 2.06 lakh crore in 2020-21, which led to an increase in the government's revenue from licence fee collections.

The government's reforms and revival package announcements have ben effective, and the telecom sector has experienced a credible and robust rebirth as a result. The beginning of the 5G deployment by telecom carriers and more investments in network development, 5G deployment in India is among the fastest in the world. India is also looking at 6G, which is several years down the line but Union telecom minister Ashwini Vaishnaw has been seen saying at several events that India is likely to launch 6G network by 2029. All of this together is anticipated to give industry's revenues a fresh boost, which is expected to further expand in the upcoming years.