NEW DELHI: A group of ministers in charge of reviving state-run telecom companies Bharat Sanchar Nigam (BSNL) and Mahanagar Telephone Nigam (MTNL) is considering taking over their entire debt and also waive off their licence fees and spectrum charges for three financial years, according to an internal telecom department document.
As on April 1, MTNL's total debt stood at Rs 8,477.35 crore while that for BSNL at 2,561.14 crore. BSNL's licence fee and bandwidth usage charges for the three fiscal years starting April 1, 2013 and ending March 31, 2016 amounting to Rs 8,930 crore and that for MTNL totalling Rs 11,149 crore could also be waived off as part of the revival package, the document added.
The proposals were discussed at an Aug 1 meeting of the ministerial panel and come at a time when both companies-faced with brutal competition from private operators-have been making huge losses.
The companies were further hurt by the debt they took to pay for the wireless broadband spectrum in 2010. While the two companies didn't need to take part in the broadband spectrum auctions, they were given the airwaves across all the circles they operated in by paying as much as the highest bidder.
The panel is also considering allowing the two operators to surrender bandwidth in some circles and to refund - totally or on a pro-rata basis - the amount that the two operators had paid for the airwaves.
While BSNL, which offers services in 20 of the 22 service areas, paid 8,313.80 crore for the bandwidth, MTNL, which provides services in of Delhi and Mumbai, paid Rs 4,533.97 crore. The proposal before the panel envisaged BSNL returning spectrum in Gujarat, Karnataka, Tamil Nadu, Kolkata, Maharashtra and Andhra Pradesh, retaining the others. MTNL, on its part, would surrender bandwidth in both its service areas. In case of a full refund, BSNL stands to get Rs 6,724.51 crore while MTNL could get Rs 4,533.97 crore, the note showed.