New Delhi: The telecom regulator will soon begin consultations on how the government should allocate 4G spectrum to Bharat Sanchar Nigam Ltd (BSNL) at a time the state-run operator is struggling to pay salaries to employees.
“The department of telecommunications (DoT) sent us a reference a few days back. Now we will carry out a consultation on allocation of 4G spectrum (for BSNL)," Telecom Regulatory Authority of India (Trai) chairman R.S. Sharma said on Tuesday.
“We will formulate a consultation paper soon. However, we can’t give a timeline as to when we will be ready with the recommendations," he said.
The telecom sector has witnessed intense competition after the entry of Reliance Jio Infocomm Ltd in 2016, which brought down tariffs to rock bottom and hit revenue streams of other operators, including BSNL, which has been incurring losses continuously since 2009-10 and has been declared ‘incipient sick’.
BSNL has requested DoT to allot an additional 5MHz in the 2100MHz band in all telecom circles except Rajasthan, where it is in 800MHz band, to be able to offer 4G services.
The state-owned company has submitted a proposal to allot spectrum by equity infusion of ₹6,767.5 crore by the government, telecom minister Manoj Sinha had informed the Lok Sabha in a written reply on 6 February.
Trai’s recommendations will be crucial as the Supreme Court in 2012 said that the best method to distribute natural resources such as spectrum was through an auction.
Meanwhile, BSNL has plans to install 1 lakh base transceiver stations to roll out 4G services after it receives government support in the form of equity. It has, however, already started 4G services in a few telecom circles by utilising 3G spectrum.
DoT, which has tasked IIM Ahmedabad with charting out a revival plan for BSNL, is also considering a proposal to fund VRS packages for BSNL at Rs6,365 crore through bonds. The government expects 75,000 employees of BSNL to retire in the next five years. However, the VRS plan is yet to be approved by the telecom commission.
For the first time in February, the company, which has 176,000 employees, delayed paying salaries.
The biggest silver lining for BSNL is that it has actually increased its market share when private telcos have shut shop. As of March end 2016, BSNL had a 9.66% market share in mobile connections. This grew to 11.51% as of March end 2018 and to 12.64% as of September end 2018.
BSNL also has huge tower assets. A new tower company named BSNL Tower Corp. Ltd (BTCL), a wholly owned subsidiary of BSNL, was incorporated in January 2018. The idea is to improve cash flow for the operator. BSNL has not yet transferred the business of mobile towers to BTCL.
The new tower company will set up a joint venture company with a partner, preferably within two years, on achieving financial health and stability with the objective of monetisation of its assets, Sinha had informed the Lok Sabha on 13 February.