Taking exception to the “shell company” tag, Teracom today said it has already paid the Rs 22.5 crore performing bank guarantee to Bharat Sanchar Nigam Limited for using wireless spectrum. The company was allotted wireless access (WiMax) franchises by the state-run telco in last November.
“BSNL has not given us access for free. We had to pay an upfront bank guarantee. Moreover, as per the agreement, BSNL will recover the spectrum cost and the interest on the spectrum cost from the franchisees,” said Rajiv Venkat, director of Teracom.
According to the agreement, BSNL would first recover the spectrum cost from our revenue and then the rest of the revenue would be shared at a 30:70 ratio, with 30 per cent going to BSNL, Venkat added.
In addition, the franchisee companies had to make an investment of $200-300 million for rolling out the services. “So where is the question of BSNL losing money?”
BSNL, in September 2009, had come out with an expression of interest for selecting a franchise partner for its Wimax services. After an initial screening process, the contract was awarded to four companies — Terracom, Adishwar, Starnet and Take Solutions — in 11 circles, on a revenue sharing model. Teracom got the Karnataka, Rajasthan and Bihar circles.
Venkat was responding to reports that suggested that BSNL bestowed favours on “shell companies” by giving them wireless access franchises.
He added that Teracom has met all financial and technical criteria and it was unfair to cast doubts on the selection process which was through competitive bidding. “It was an open and transparent process,” he said.