Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) have shot off separate letters to the department of telecommunications (DOT) asking the Government to bear the entire burden of over Rs 10,000 crore that they need to fork out as one-time payment for additional spectrum.
The reason: both of them say they are in serious financial trouble and do not have the cash to pay for it, but they require the additional spectrum to “serve their customers.”
The move by the two PSU’s could completely upset the government’s target to get about Rs 40,000 crore this financial year from one time spectrum fee for additional spectrum with incumbents and the upcoming 2G auction, if they have to make a provision to support them .
That is because the two PSUs constitutes for a substantial portion of the over Rs 27,000 crore the government expects to get from one-time fee from incumbent operators who have more than 4.4 Mhz of GSM spectrum (and more than 2.5 MHz in CDMA) for which they now have to pay prospectively. The decision was taken by the EGOM in its last meeting on 8th October.
Endorsing the demand the DOT has decided to put the ball in the court of the empowered group of ministers (EGOM) on telecom headed by finance minister P Chidambaram. They have pointed out that considering the financial difficulties based by the two PSUs, it will put up a request for getting an in principal approval from the EGOM and then from the cabinet to provide the two PSU’s with financial support so that they can retain their additional spectrum. It has noted that the amount and manner of its phasing may be decided between the DoT and the finance ministry later on.
In 2011-12 BSNL had made losses of over Rs 8,800 crore while MTNL was equally in the red with losses of over Rs 4,100 crore. BSNL had also gone to the Government, with a request to return back its broadband wireless access licence in 13-14 circles for which they had paid over Rs 8,300 crore.
BSNL for instance has more than 4.4 MHz GSM spectrum in 20 circles and in 15 of them has more than 10 MHz, the highest spectrum available to any operator. In his letter R K Upadhyay, chairman of BSNL has said that it has already made significant investment in rolling out network to utilise this spectrum but “due to present financial condition BSNL is not in a position to pay any additional amount for retention even though spectrum is essential to serve customer”> However he has conceded that it is willing to return its additional spectrum in Kerala in CDMA where it has 3.75 Mhz.
MTNL chairman A K Garg has said that it has 12.4 MHz in GSM in Delhi and Mumbai and has again made significant investments to utilize them so retention of the spectrum is essential to serve the customers .
