The Department of Telecom’s proposal on allotting state-run BSNL and MTNL spectrum worth Rs 13,000 crore is most likely to be delayed by the Finance Ministry, reported the New Indian Express.
BSNL and MTNL were expected to get 4G spectrum by the end of this year to start the rollout of 4G services. However, sources in the ministry have said that the two state-run telecom operators would have to wait until next year to roll out 4G services.
Reports from a few days ago said that Department of Expenditure was looking at the pros and cons of the proposal, which will add on Rs 13,000 crore. The Ministry seems uninterested to add on more expenditure, at a time when it is struggling hard to rein in the fiscal deficit.
“Writing it as expenditure at this period 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 been waiting to acquire 4G services for quite some time and hence are seeking 4G spectrum through fresh equity infusion. This will rule out any capital expenditure to be suffered. Since both BSNL and MTNL have been declared ‘incipient sick’ by the Department of Public Enterprise, the costs and expenses will be examined accordingly.
While MTNL has plans to roll out 4G services with the help of a Rs 6,292 crore capital issuance from the government, BSNL is seeking Rs 6,652 crore as equity infusion to fund the purchase of 4G spectrum, which is worth about Rs 13,885 crore.
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