Bailout PSU telcos, ministry tells FM

“BSNL is the only service provider giving connectivity to the far-flung rural areas. The service rendered by BSNL in the rural areas of the country cannot be replicated,” Raja said in a letter to the Finance Minister. Citing earlier precedents, Raja said in terms of the New Telecom Policy, 1999, BSNL (then DoT) was not required to pay an entry fee for Cellular Mobile Licences, which were bundled with initial spectrum of 4.4 Mhz.

“BSNL was also exempted from payment of 2G spectrum charges of Rs 1,650 crore in view of its immense social and rural obligations”, he added.

Upon discovery of the price for 3G and Broadband Wireless Access (BWA) spectrum, BSNL and MTNL recently paid Rs 18,500.38 crore and Rs 11,097.97 crore, respectively, to the government. Both the companies have been urged the government to return their fund citing their social responsibility. As both the PSUs are facing stiff competition from private players and losing market share, concession would have bring relief to them, said an official in the Department of Telecom.  

 However, private operators have opposed any concession to PSUs, saying that would allow them (PSUs) to offer predatory prices to complete with private players.

It may be noted that the Finance Minister had raised over Rs 1,06,262 crore  from sale of spectrum for both 3G and BWA services.