Private mobile operators have raised objections to a proposal to give financial support to State-run telecom companies. The Cellular Operators Association of India and the Association of Unified Service Providers of India have written to the Government saying that it will disturb the level-playing field if financial support is given.
The Department of Telecom has sought the Cabinet’s approval for a Rs 20,000-crore bailout package for Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd. The Department proposes to waive the one-time spectrum charge and refund money for surrendered broadband spectrum.
BSNL wants to surrender broadband spectrum (2300 Mhz band) in six circles including Karnataka, Kolkata, Andhra Pradesh, Gujarat and Maharashtra.
If the Cabinet accepts this request, the PSU will get a refund of Rs 6,724.51 crore. MTNL has sought a refund of Rs 4,533.97 crore for surrendering broadband spectrum in Delhi and Mumbai. In addition, the companies are supposed to pay an upfront charge of Rs 1,626 crore and an annual fee of Rs 893 crore as one-time fee for excess spectrum beyond 4.4 Mhz.
BSNL’s finances have taken a turn for the worse with its income declining from Rs 35,812 crore in 2008-09 to Rs 27,934 crore in 2011-12. During this period, the company’s bottomline changed from a net profit of Rs 574 crore to a loss of Rs 8,851 crore. MTNL’s losses have also mounted to Rs 4,110 crore compared with a net profit of Rs 211 crore in 2008-09.
But the private operators, through the industry body, have opposed any support by the Government. “Consideration of any such proposal is not permissible as it will be in contravention of all tenets of policy, fair competition and level playing field,” the two industry associations said in a letter to Telecom Minister Kapil Sibal.
thomas.thomas@thehindu.co.in