NEW DELHI: The Department of Telecom’s (DoT) proposal to allocate 4G Spectrum worth Rs 13,885 crore to Bharat Sanchar Nigam Ltd (BSNL) has not gone down well with the Union Ministry of Finance, which is not in favour of allocating 4G Spectrum to the state-run telco in lieu of preferential equities to the government.
BSNL, which operates telecom services all across India except in Delhi and Mumbai, has requested 5 MHz of 4G Spectrum on the 2,100 MHz band. It has already sent an approved proposal to DoT in this regard.
The estimated cost of the spectrum is Rs 13,885 crore and BSNL proposes 50 per cent payment to be done upfront and the remaining in 10 equal instalments.
However, the finance ministry is not in favour of BSNL’s payment plan, said sources in the ministry. “BSNL wants upfront payment to be met through the equity route, where government will be given preferential equities in lieu of the spectrum, valued at Rs 6,942.5 crore. The ministry is not in favour of it, given the current financial condition of BSNL,” a senior finance ministry official told this publication.
Another reason for the finance ministry’s disapproval is that the government is working on a financial package for the rescue of crisis-ridden BSNL. In that context, the preferential equity option would increase the financial burden on the total bailout.
However, finance ministry is not alone in its disagreement with the BSNL proposal. Even NITI Aayog has questioned the relevance of allocating 4G Spectrum in lieu of equities to government.
The finance ministry official said that Telecom Regulatory Authority of India (TRAI) will start consultation on BSNL’s proposal and will give its final report by the end of May or the first week of June.
TRAI on Tuesday had said that it has received the government’s reference on 4G Spectrum allocation to BSNL and will soon start the consultation process.
“TRAI will soon hold consultations on 4G Spectrum allocation to BSNL, we have received the reference some days back,” TRAI chairman RS Sharma told media on the sidelines of an event.