Govt. approves Rs 11,258 crore revival package to BSNL, MTNL

State-run telecom service providers BSNL and MTNL will get Rs 11,258 crore worth financial support from India government as they will get refund for their BWA spectrum fee paid in 2010.

BSNL will get Rs 6,724.51 crore and MTNL will receive Rs 4,533.97 crore. Both telecom operators got broadband wireless access (BWA) spectrum license in 2010 after a spectrum auction to enhance India’s mobile broadband penetration.

However, in the last three years, only Bharti Airtel utilized BWA spectrum to launch 4G services in 4 cities on TD-LTE technology. Reliance Jio Infocomm is yet to announce its launch plan despite creating huge hype earlier.

Govt approves Rs 11,258 crore revival package to BSNL, MTNL

The surrender of Broadband Wireless Access spectrum by BSNL and MTNL reflects lack of a strong ecosystem for 4G across the globe and unviable market conditions in India. BSNL will surrender Broadband Wireless Access license for Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Kolkata. MTNL will give up license in Mumbai and Delhi.

The refunded amount will help these struggling telecom majors to arrange finances to meet basic financial commitments such as operation and maintenance of their telecom network.

BSNL has clocked revenue of Rs 19,305 crore and loss of Rs 6,536 crore for the nine month period ending 31 December, 2012. MTNL has reported revenue of Rs 2,685 crore and net loss of Rs 3,335 crore for the nine month period ending December 31, 2012. ( BSNL clocks revenue of Rs 19,305 crore in first 9 months of FY 2012-13 )

It is not known whether other telecom majors will come forward to surrender their license as well. Aircel, Tikona, Bharti Airtel, Reliance Jio Infocomm and Augere are the BWA license holders.

Baburajan K
[email protected]