State-backed duo go cap-in-hand to government

15 Oct 2012

Debt-ridden state-backed telcos Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) have called on the government to pay the one-off fee for holding additional spectrum. As previously reported by CommsUpdate, the Empowered Group of Ministers (EGoM) approved a decision last week to impose a single one-off charge on all telcos holding more than 4.4MHz of GSM spectrum or 2.5MHz of CDMA spectrum per circle. ‘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,’ Business Line quotes a letter from BSNL’s managing director to the Department of Telecommunications (DoT) as saying. MTNL sent a similar letter, requesting that the ‘fee for retention…be borne by the government.’ Whilst a potential bailout for the two companies is being discussed by the Finance Ministry and the DoT, industry representatives have complained that such a move would ‘distort the level playing field’ as competitors of the state-backed duo would still be forced to shoulder the burden of paying for their own additional spectrum holdings.