The Union Cabinet today gave its approval for financial support to Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) on surrender of broadband spectrum by them. Upfront charges paid for such spectrum would be refunded.
“The objective of this decision is to provide financial support to the extent of one-time upfront charges paid for broadband spectrum for six service areas of BSNL and both service areas of MTNL on surrender of the spectrum,’ said a official statement.
The six areas of BSNL are Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Kolkata.
While BSNL will get Rs 6,724.51 crore, MTNL will get back Rs 4,533.97 crore.
“The refund will be made to ensure support for the revival and revitalisation of BSNL and MTNL in the competitive telecom sector. It shall also help these PSUs to arrange finances to meet basic financial commitments such as operation and maintenance of their telecom network,” the statement said.
Both companies had tried to offer broadband services using this spectrum but were not been able to zero in on find a profitable business model. The companies had roped in private players as franchisees but the contracts were withdrawn after alleged irregularities.