A new report has come up which hints towards the stalling of allocation of 4G spectrum to the two-government led telcos, BSNL and MTNL. As per this new update which comes from the officials, the finance ministry will likely extend the timeline which was proposed by the Department of Telecommunications (DoT) for the allocation of fourth-generation network services to these state-run telcos.
Fiscal Deficit Delays Investment for BSNL and MTNL
To recall, before this happening, both the telcos were expecting to receive the 4G spectrum before the end of this year and were already readying themselves for the launch of 4G services. However, to their disappointment, the department won’t be going ahead with the process since the ministry of finance is looking at the pros and cons of the expenditure which is summing up to be around Rs 13,000, a figure which will likely affect the financial situation in the country amidst already struggling fiscal deficit. This news is reported by NewIndianExpress.
Sources in the ministry remarked, “Writing it as expenditure at this period of time seems very difficult. The (finance) ministry is weighing other macroeconomic factors and this is expected to take more time than anticipated earlier. I do not see it in any time soon.”
Manoj Sinha Bets on 4G for State Run Telcos
After being declared as ‘incipient sick’ by the Department of Public Enterprise, MTNL and BSNL decided that they would take the capital in the form of equity infusion following due examinations with the money being in the way of costs and expenditure.
It’s also noteworthy that BSNL and MTNL had been on the task of acquiring the 4G spectrum from quite some time now. Since all the private telcos were already migrating to the 4G network, the state-run telcos were at a disadvantage. Last month, telecom minister Manoj Sinha had also stated that it would be hard for the state-run telcos to survive without the 4G network and also added that the government would come up with some solution or strategies to settle the issue.
Manoj Sinha had remarked back in September, “I will try by the end of this year, it should not be in 2019, but in 2018, the government should decide on the allocation of 4G spectrum.”
As per the report, MTNL will infuse Rs 6,292 crore capital into the company in lieu of equity, whereas BSNL will be taking help of Rs 6,652 crore in the form of equity infusion to purchase 4G spectrum worth Rs 13,885 crore.
