Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd have written to the Telecom Ministry seeking a bailout package to fund their one-time spectrum fee burden.
The two telecom companies are facing a payout of about Rs 10,000 crore after an Empowered Group of Ministers decided to impose a fee on incumbent players with excess spectrum.
The EGoM, which met last week, had decided to collect a levy from all operators with more than 4.4 Mhz of GSM spectrum and 2.5 Mhz of CDMA spectrum. Both BSNL and MTNL have excess GSM spectrum in all the circles they operate in.
“Due to the present financial conditions, BSNL is not in a position to pay any additional amount for retention even though the spectrum is essential to serve its customers,” BSNL’s Chairman and Managing Director, R.K. Upadhyay, wrote in a letter to the Secretary of the Department of Telecom.
In a similar letter, MTNL’s Chairman and Managing Director, A.K. Garg, said “it is therefore requested that the fee for retention may be borne by the Government.”
Senior DoT officials said that the issue will be taken up with the Finance Ministry to look at a possible bailout after taking approval from the EGoM and the Cabinet.
However, private operators said that if such a package is given to the two PSUs, then they would also seek financial support.
“It will not be fair that the Government gives any support to the PSUs alone when they are competing with us in the same market. This will distort the level playing field,” said an industry representative.
Private operators want fee shelved
While the EGoM’s decision impacts BSNL and MTNL the most, private players such as Airtel and Reliance Communications have to cough up around Rs 4,000 crore each.
The Association of Unified Telecom Service Providers of India (AUSPI), representing the interests of RCom and Tata Teleservices, has written to the Prime Minister to shelve the plan to charge the one-time fee on the ground that it favoured incumbent GSM players.
“Unilateral changes in terms and conditions of the established contract with operators would send very negative signals to investors about sanctity of contracts in India,” the association said in its letter.