GoM on BSNL, MTNL revival to meet on Jan 8

This would be the fourth meeting that the GoM would conduct on the issue

The Group of Ministers (GoM) looking into a revival strategy for Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) would meet on Wednesday.

This will be the fourth meeting by the GoM to discuss key issues regarding the possible revival of the two state-owned telecom service providers. It had last met on September 12 last year to discuss issues such as pension for MTNL employees and refund of broadband wireless access (BWA) spectrum fee to BSNL and MTNL after they surrender the airwaves.

The department of telecommunications had proposed the refund as the payment had seriously depleted the cash reserves of both. The two state-owned telecom operators had asked for a refund of the entire amount paid. BSNL had paid Rs 6,725 crore and MTNL Rs 4,534 crore. Both had together accumulated a loss of Rs 39,314 crore (BSNL Rs 24,681 crore and MTNL Rs 14,633 crore) at the end of March 2013.

The GoM had already discussed a few options regarding this. Under the first measure, it had suggested full refund to both. In the second, it suggested the government consider pro-rata refund on the basis of the discovered price (of the spectrum when auctioned). In this case, BSNL will get Rs 5,203 crore and MTNL will get Rs 3,518 crore, if the reference date is January 31, 2013. The companies will also get interest payment on the refunded amount.

In an earlier meeting, the GoM had proposed to revive BSNL and MTNL by waiving the one-time fee the two telcos needed to pay for retaining additional spectrum beyond 4.4M Hz in GSM and 2.5 MHz in CDMA. This would give a burden of Rs 12,000 crore to the exchequer.