Cabinet okays refund to BSNL, MTNL for 4G spectrum surrender

The union cabinet Thursday approved refunding Rs.11,258.48 crore to MTNL and BSNL which the two state-run telecom firms had paid for fourth generation (4G) spectrum in the 2010 auction.

"BSNL will be refunded Rs.6,724.51 crore and MTNL will be given Rs.4,533.97 crore in due course ... it would be done in a staggered manner over a period of time," Information and Broadcasting Minister Manish Tewari told reporters after a cabinet meeting here.

An official release said the objective of this decision is to provide financial support to the extent of one-time upfront charges paid for broadband wireless access spectrum for six service areas of BSNL and both service areas of MTNL on surrender of the spectrum.

"The six licensed service areas of BSNL are Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Kolkata," it said.

Tewari said these refunds will help in the economic revival of the two companies.

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 Sep 12.

"The refund will be made to ensure support for the revival and revitalisation of BSNL and MTNL in the competitive telecom sector. It shall also help these PSUs to arrange finances to meet basic financial commitments such as operation and maintenance of their telecom network," the release added.