NEW DELHI: The finance ministry is likely to delay the Department of Telecom’s proposal on allotting spectrum worth Rs 13,000 crore for 4G services to state-run BSNL and MTNL, sources in the ministry said.
The two state-run telecom service providers were expected to receive the 4G spectrum by the end of this year and start rolling out 4G services. However, sources in the ministry said that the operators would have to wait until next year for rolling out 4G services.
A few days ago, it was reported that the Department of Expenditure was looking at the pros and cons of the proposal, which will add Rs 13,000 crore to the expenditure of the government, which finance is reluctant to add as it is struggling hard to rein in the fiscal deficit.
“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.” the source said.
BSNL and MTNL have sought 4G spectrum through fresh equity infusion, effectively ruling out any capital expenditure to be incurred as both have been declared ‘incipient sick’ by the Department of Public Enterprise. Since these are costs and expenditures, they will be examined accordingly.
The two operators have been wanting to acquire the 4G spectrum for quite some time to compete with private players, and had already furnished the government with a detailed report on 4G services.
In mid-September, Telecom Minister Manoj Sinha had said that it would be difficult for BSNL and MTNL to survive without 4G spectrum and the government was working on a strategy to settle issues that had emerged due to some decisions of the apex court.
“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,” Sinha had said.
MTNL plans to roll out 4G services with the help of a Rs 6,292 crore capital issuance from the government, while BSNL has sought Rs 6,652 crore as equity infusion to fund its spectrum purchase worth about Rs 13,885 crore.