- BSNL and MTNL have been seeking revival package for a while now
- The government was said to allocate 5G spectrum to telcos for trials this month
The Digital Communications Commission (DCC), the apex decision making body at the telecom department, is expected to discuss 5G trials and relief for BSNL and MTNL during its meeting on June 13, according to sources close to PTI. India expects to roll out commercial 5G services at par with leading markets of the world by 2020. “DoT committee on 5G is ready to agree on the allotment of spectrum for trials across all bands at a nominal cost of Rs 5,000 to 10,000 in a band for 1 to 1.5 years. There should be no shortage of spectrum during trials,” an official said.
The DCC is also likely to discuss a relief package for BSNL and MTNL before sending the proposal to the Cabinet, according to a source. Both companies have also sought spectrum for 4G services through equity infusion from the government.
BSNL, which has the lowest debt of Rs 14,000 crore among all telecom operators, has sought 4G spectrum across India through equity infusion of Rs 7,000 crore. The total spectrum will cost the firm Rs 14,000 crore.
The PSUs have been also ailing because of high revenue-to-debt ratio due to a high number of government employees that were transferred by the Department of Telecom to them at the time of their formation. BSNL has 1.76 lakh employees across India and MTNL has 22,000 employees.
MTNL has sought a refund of the interest that it paid for broadband wireless access spectrum which it was given by the government and asked to pay the price that was determined in auctions held in 2010.
Both state-run telecom firms have asked for permissions to monetise their land assets as well as the voluntary retirement scheme for employees on the Gujarat model. Under the Gujarat model, an amount equivalent to 35 days of salary for each completed year of service, and 25 days of salary for each year of service left till retirement is offered.
The VRS scheme for BSNL and MTNL will have a revenue impact of Rs 6,365 crore and Rs 2,120 crore respectively.
The revenue-to-wage ratio in the case of MTNL has swelled to 90% while in the case of BSNL it is around 60-70%. The DoT has recommended that VRS of both PSUs should be funded through a 10-year bond issue and the bonds should be paid back by lease revenue that they will get from land asset monetisation.