08.04.2014:DoT wants transfer of telecom assets to BSNL

The Department of Telecommunications (DoT) will soon move a Cabinet note seeking approval for transferring mobile network assets created in Naxal-prone regions to Bharat Sanchar Nigam Ltd (BSNL), a top official told ET. The move is aimed at ensuring mobile coverage in these strife-torn regions even after the Universal Services Obligation Fund (USOF) — an independent DoT arm — stops supporting the venture, post-2019. The state-run BSNL was mandated last year to establish mobile connectivity in 2,199 regions prone to leftwing extremism in Andhra Pradesh, Chhattisgarh, Jharkhand, Odisha, Bihar, Maharashtra, Madhya Pradesh, West Bengal and Uttar Pradesh, to improve communications and home ministry surveillance operations. The Rs 3,046-crore project, internally known as the LWE rollout, will be entirely subsidised by USOF. The issue of transferring ownership of LWE project assets to BSNL was suggested by USOF and has been endorsed by the Telecom Commission, which is the top decision-making wing of the communications ministry. "The TC agrees that the ownership of assets created under the LWE project should vest in BSNL to ensure continued service provision even beyond the project period, subject to Cabinet approval," said the DoT official quoted above. He added such ownership transfer would "ultimately benefit BSNL", as the LWE project assets would be merged with its existing pan-India mobile network. BSNL will also be "eligible for Cenvat credit and reduced sales tax outflows" once it takes over the assets, he said. "But it will be solely responsible for maintaining networks and delivering mobile services in areas affected by leftwing extremism." Actual transfer of ownership to BSNL, however, is likely in late-2019, after USOF stops funding the LWE project. For the first five years, DoT will be custodian of the project. -The Economic Times