he telecom department has told the panel of ministers tasked with finding solutions to revitalize state-owned telcos BSNL and MTNL, that the spectrum auction rules of 2010, which state that companies will not get a refund if they surrender their airwaves, should not apply to the two public sector mobile phone companies.
The department (DoT) has argued that BSNL and MTNLBSE 0.00 % were given 4G airwaves or wireless broadband spectrum in 2008, two years prior to the auctions of these frequencies for private operators, and has added that the allotment letters given to the PSUs did not state anything related to surrender of bandwidth. Private telcos are bound by rules in the Notice Inviting Applications ( NIA) that was issued in 2010 prior to the auctions, while the PSUs were bound rules issued by it in 2007, the department has argued, while asking the panel of ministers to consider two options for refunding BSNL and MTNL.
Last month, the Centre had constituted a panel of ministers tasked with looking at ways to revitalize the two public sector mobile phone companies after telecom minister Kail Sibal had urged prime minister Manmohan Singh to set up an Group of Ministers with the mandate to come up with a strategy to revive BSNL and MTNL.
This panel must take a call on the telecom department's demand that Cabinet approve Rs 23,000 crore bailout for BSNL and MTNL. The DoT had earlier approached the Union Cabinet stating that BSNL had surrendered 4G spectrum in six regions and was entitled to a refund of Rs Rs 6,725 crore, while the corresponding figure for MTNL, which has given up these frequencies in Delhi and Mumbai is Rs 4,534 crore.
The department has asked the panel of ministers to consider two possibilities - refund the entire amount of Rs 11,258.48 crore to the two PSUs, or alternatively, since these airwaves were given in 2008, the two companies could be reimbursed on a pro-rata basis, which would see them get a total of Rs 8723 crore.
Justifying the proposal, the DoT has also told the panel of ministers that both PSUs were given 4G airwaves in the 2.5-2.6 GHz band, while private operators were given spectrum in the 2.3-2.5 GHz band, and unlike the latter band, the technology for providing 4G services in the 2.5-2.6 GHz 'had still not matured, as a result of which both PSUs have not been able to make gainful use of the spectrum