Govt may discuss Rs 12,800 cr refund to BSNL, MTNL on Jan 9

The Cabinet on January 9 is likely to discuss refund about Rs 12,800 crore to state-run MTNL and BSNL which the telecom PSUs had to pay for wireless broadband spectrum in 2010 auctions.

"It is on agenda of Cabinet meeting on Thursday," a source told PTI when asked about status of refund of broadband wireless access (BWA) spectrum amount to the telecom PSUS.

The proposal was approved by the Group of Ministers, headed by Finance Minister P Chidambaram, tasked to chart the course of profitability of both PSUs in its last meeting on September 12.

Both the PSUs have offered to surrender their BWA spectrum and sought refunds. The two companies did not have to buy spectrum in the auction but were asked to match the price that a successful bidder had to pay for the airwaves.

BSNL had to pay Rs 8,313.8 crore and MTNL Rs 4,534 crore for these airwaves which put a heavy burden on their books.

The GoM also decided that the government would bear pension load that MTNL pays to its about 43,000 employees absorbed from Department of Telecom.

The pension proposal of MTNL was approved by Cabinet recently. This would cost the government an estimated Rs 500 crore annually.

The decision is likely to bring additional amount of about Rs 1,500 crore (including interest) in the books of MTNL as refund from the government for the pension that the PSU paid to its employees.

The GoM is scheduled to meet tomorrow to discuss rest of the issues plaguing the state-run telecom firms.

After reporting widening of losses for nine quarters in a row, MTNL reported narrowing of its standalone net loss to Rs 947 crore for the July-September 2013 period mainly on account of lower provisions for employee retirement benefits.

The company had reported a loss of Rs 1,093.72 crore in the same period a year ago.

In 2012-13, MTNL recorded a net loss of Rs 5,321.12 crore on annual revenue of Rs 3,428.6 crore.

BSNL's losses, as per unaudited results, stood at Rs 8,198 crore for 2012-13 compared Rs 8,851 crore in 2011-12.

BSNL has been logging losses since 2009-10. The company's profits started declining after 2004-05, when it had made net gains of Rs 10,183 crore.