INSUBCONTINENT EXCLUSIVE:
two chronically ill telecom PSUs BSNL and MTNL, and the Union Cabinet is likely to take a decision on 4G spectrum allocation to them by the
third week of the current month after DoT (Department of Telecommunications) places the note before it for consideration.The cabinet could
take up the 4G spectrum proposals for these telcos as the legal opinion from the Solicitor General has come giving a green signal to the
administrative allocation
This key legal issue was needed to be cleared before the cabinet could take the proposal, said sources
BSNL and MTNL being PSUs don't participate in spectrum auction
But they pay the highest bidder price for the spectrum they are seeking to obtain."The decision (from Cabinet) could come this month
Cabinet may take decisions on 4G spectrum of BSNL/MTNL will be taken by the 3rd week of September
Thereafter it may take about 3 to 6 months time to complete the formalities and both PSUs may get the spectrum worth," sources said
In a highly competitive data oriented market, not having 4G services on wireless networks are further aggravating the weak market share of
the two the PSUs .The funds infusion in both BSNL and MTNL, according to sources will be through bonds as has been the case of PSU bank
recapitalisation.The government will go for 4G spectrum allocation to the two telecom companies as 100 per cent capital infusion against
earlier proposal to 50 per cent while the rest 50 per cent were to come from PSUs but looking at their extremely weak financials where both
are unable to pay salaries, this idea was dropped.BSNL has not paid salaries to its 1.76 lakh employees for August and MTNL has not paid for
The cost of 4G spectrum to them will cost Rs 20,000 crore
BSNL has sought allocation of an additional 5 MHz spectrum in 2100 MHz band preferably contiguous to its existing 5 MHz block in the same
band in all service areas, except Rajasthan where spectrum in not available
For Rajasthan, the operator has sought 5 MHz in 800 MHz band for launching of 4G services
The value of spectrum is around Rs 14,000 crore
For MTNL, the airwaves will cost Rs 6,000 crore.The Department of Telecom to be on the safer side of the Supreme Court's 2012 order that
radio waves must be auctioned to get maximum value from commercial use, had sought the opinion of the Solicitor General Tushar Mehta where
it has received a positive response
This clears the desk for any legal hurdle for BSNL/MTNL or cabinet on allocation of 4G spectrum to them.The stressed telecom firms have
approached the Telecom Department for immediate help as they are facing financial stress
This has been aggravated due to the tariff war triggered by the entry of Reliance Jio.The employee cost of the BSNL is 75.06 per cent and
that of MTNL is 87.15 per cent of their total income, while the same for private telecom companies varies between 2.9 to 5 per cent.Get
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