The government is likely to take back 4G spectrum from state-owned Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) and refund them about Rs. 12,846 crore paid in fee to the government.
The two companies expressed their inability to launch broadband wireless access (BWA) services for want of requisite funds. The Department of Telecommunications (DoT) has prepared a note for the group of ministers (GOM) on the issue of revival of the two public sector units.
If the GoM decides to take back spectrum from the two companies and refund them, there are likely to be similar demands from existing private players who were unable to launch services.
“There are two companies that won spectrum for BWA services through auction but are not in a position to launch services. They may also seek refund of their fee,” said an official of a large telecom service provider.
The two PSUs were issued spectrum in 2008. According to rules, they had to pay market rate for the spectrum issued. Subsequently, a 4G spectrum auction was held in 2010, where the market price of 4G airwaves was determined. BSNL had to pay Rs. 8,313 crore as spectrum fee while MTNL paid Rs. 4,533 crore.
However, both companies begun facing financial crunch and were not able to compete with private operators.
Now, with both companies having raked in huge losses, the DoT has suggested to the government to refund the fee. Earlier, communications and IT minister Kapil Sibal had written to the government that BSNL is expected to register a loss of about Rs. 10,000 crore during last fiscal year, while MTNL’s networth has been completely eroded.