There?s some bad news for state-owned telecom operator BSNL. The company, which was hoping for a refund of R8,000 crore after the government accepted its request for surrendering its broadband wireless access (BWA) spectrum in 20 circles, would have to wait for more than a year to get the money back.
This is because the department of telecommunications (DoT) has decided that only after the surrendered spectrum is auctioned would it pay the company back, depending on the proceeds from the spectrum sale.
The next round of auctions for BWA spectrum in the 2.5 Ghz band, which BSNL has surrendered, has not yet been planned by the government. Sources said that it could easily take more than a year for it to be scheduled.
The delay in the refund would mean that BSNL would not be able to factor in the amount in its results for the fiscal 2011-12, during which it is expected to post a net loss of around R7,000 crore. This would be third consecutive year of the company posting losses. Since the auction of BWA spectrum is unlikely in the current fiscal, the company may not be able to factor in the amount even in the current year?s books.
The auctions for BWA spectrum were held in 2010 and the government had netted R38,617 crore through the process. State-owned operators like MTNL and BSNL had not participated in the bids and were allocated the spectrum ahead of their private sector peers. After the auction, they had paid the bid price as per the government guideline.
Finding the operations unviable, BSNL had last year written to DoT that it would like to surrender the spectrum in certain circles. Though the bid documents did not have the provision for surrendering the spectrum and getting a refund, telecom secretary R Chandrasekhar had then told FE that being a government-run company that was not doing well, a sympathetic view would be taken on the request.
Company officials expressed unhappiness at the government?s stance of paying it back only when the surrendered spectrum is auctioned and amount realised. ?Getting into 3G and BWA was not the company?s decision as was the case with other private sector operators. It was the government which decided on our behalf and made us pay. So it should refund the amount to us upon surrendering rather than wait for the amount to be realised through an auction later,? said an official.
BWA services have so far not taken off in the country with only Bharti Airtel launching it recently in Kolkata and Bangalore. Infotel Broadband, owned by Reliance Industries, which has spectrum for all the 22 circles, is yet to launch services.
The 3G services of BSNL have also not clicked. Though it has the largest presence by having spectrum in 20 circles, its subscriber base is meagre. The company tried to rope in franchisees to market its services but did not succeed due to faulty planning.