The government was asked to allocate 4G spectrum to both BSNL and MTNL at the earliest so that the PSUs will be able to compete with private telecom operators and survive in the competitive Indian telecom market. The Standing Committee of Information Technology has asked the government to allocate the required spectrum to the state-run telcos. “The Committee is of the view that both BSNL and MTNL will lose the data market if they are not given 4G services soon. To compete and survive in the telecom market, the Committee feels that 4G spectrum should be given to them at the earliest,” BJP MP Anurag Singh Thakur said in the report tabled in Parliament. Both Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) have already submitted their proposals for the allotment of spectrum. If government allocates the required spectrum, BSNL and MTNL will launch 4G services in the telecom circles where they’re operating.
MTNL has its operations in Delhi and Mumbai telecom circles, while BSNL is operating in 20 telecom circles. It’s also revealed that the telcos have requested for 5 MHz block of radiowaves in 2100 MHz band, as it was reported earlier. “The Committee has been informed that Hon’ble Minister (Manoj Sinha) had declared on the floor of the House that government is shortly going to take a final decision in the matter and the department is actively considering giving 4G spectrum,” the report further added.
Furthermore, the allotment of 4G spectrum to BSNL and MTNL will have a negative impact on the wireless and broadband segments as it’s against equity infusion.
Since early 2014, BSNL has been saying that it will roll out 4G services very soon, however, that didn’t happen until now. Very recently, the operator introduced 4G services based on the 3G spectrum in five cities of Kerala, meaning the telco is ready to launch the high-speed 4G services. However, the government is not allocating spectrum to the firm.
Yesterday, we reported that BSNL and MTNL are amongst the worst performing government-owned firms alongside Air India. BSNL showed some signs of profit in the financial year 2016, however, after the entry of Reliance Jio, the telco again started suffering. As of December 2017, the MTNL has an outstanding debt of Rs 16,870 crore, followed by BSNL with close to Rs 9,000 crore debt.
This number might sound like a small one when compared to the debt-laden private firms, but the government is under serious pressure regarding the future of BSNL and MTNL. For the year 2018-19, the projected revenue of BSNL is Rs 28,500 crore, while the expenditure is expected to come around Rs 35,850 crore.
Furthermore, the Parliamentary Panel also requested the government to consider the voluntary retirement scheme submitted by both the PSUs at the earliest. In MTNL’s case, the company is incurring more than 76% of its revenue of staff itself, which is by far a huge number when compared to 4% to 6% by private firms.
And the Committee is in a state of mind to reduce the staff. Nevertheless, the government should allocate 4G spectrum to both the telcos at the earliest, at least to allow them to compete with private firms. Recently, BSNL inked a deal with Finnish gear maker Nokia for rolling out the 4G services in 10 telecom circles.