Public sector telecom services BSNL and MTNL got preferential treatment in the allocation of 3G spectrum by getting it much earlier than private firms. However, once the auction got over, realization is dawning on BSNL authorities that it is not an advantage after all.
The government had reserved one slot of 3G and Broadband Wireless Access (BWA) spectrum for state-owned telecoms BSNL and MTNL, resisting the stipulations laid down by the telecom regulator TRAI. This was done by the government to ensure that the public sector telecoms could avoid the auction process. Despite operating for 18 months, the PSUs couldn’t convert the head start into building a substantial customer base.
The auction for the 3G spectrum was conducted by the Department of Telecommunications (DoT) on May 19 and had fixed May 31 as the last date for payment of dues. BSNL paid Rs 10,186.58 crore for all-India 3G spectrum excluding Delhi and Mumbai. However, in a letter dated 31 May, BSNL MD Kuldeep Goyal wrote to DoT Secretary P J Thomas to refund the amount.
Mr. Goyal bases his argument on the fact that private players made informed commercial bids, whereas BSNL was allotted 3G spectrum all over India without ascertaining commercial viability. He also observes that private telecoms are paying less in absolute terms than BSNL. Excluding Delhi and Mumbai, while BSNL had to pay Rs 10,186.58 crore, Aircel need to pay only Rs 6,499 crore, Tata Rs 5,864 crore, Idea Rs 5,769 crore, Bharti Rs 5,731 crore, Vodafone Rs 5,054 crore, and Reliance 2,021 crore, clarifies Mr. Goyal in the letter.
MTNL too is likely to follow BSNL in its refund demand. Both PSUs are planning for a similar demand for BWA spectrum as well, the last date for which is June 22. In this case, government’s revenue from the spectrum auctions will dwindle considerably.
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