BSNL allays Niti Aayog’s ‘fears’ on 4G rollout

State-controlled telecom service provider Bharat Sanchar Nigam Limited (BSNL) has clarified to the department of telecom (DoT) on ‘apprehensions’ raised by the national policy think tank Niti Aayog, on raising preferential equity infusion for the rollout of much-awaited fourth-generation or 4G technology-based services.

“We have already responded to the DoT on concerns raised by the Niti Aayog which wanted to ascertain few things including revenue from 4G services, spectrum bands, and equipment to be deployed,” BSNL chairman Anupam Shrivastava said, adding that its concerns were legitimate.

The Amitabh Kant-headed body has earlier objected to the proposal of preferential equity infusion amounting to close to Rs 14,000 crores for the 4G foray of two public sector telecom firms— BSNL and Mahanagar Telephone Nigam Limited (MTNL), indicating uncertainty over return on investments.

The department had sought think tank’s suggestions on the 4G spectrum allocation proposals from the state-driven telcos which felt that such was much-needed to stay competitive with the likes of Reliance Jio as well as Vodafone Idea and Bharti Airtel.

Now, after receiving clarification from the state-driven operator, the department has turned to the sector regulator for its views before taking any further action.

In a recent statement aimed to pacify agitating employees who have called for a three-day strike, the department said that the issue of spectrum allotment for providing 4G services to BSNL is being referred to Trai, and further action will be taken on receipt of the said recommendation.

Earlier this month, the government, after initial discussions at the Digital Communications Commission (DCC), has sought Trai’s suggestions on the quantum, pricing and appropriate frequency bands, and if such airwaves could be administratively allocated to BSNL and MTNL.

MTNL operates only in two metropolitans— Delhi and Mumbai whereas BSNL offers pan-India voice and data services in addition to government-backed connectivity programs in remote regions which otherwise appear to be non-lucrative to privately-owned telcos.

Lately, the government has come under intense pressure from the telco’s workforce which under various groups were alleging bias towards telecom PSU to favour billionaire Mukesh Ambani-controlled Jio.

Mumbai-based Jio launched pure-play commercial 4G services in September 2016, and while rivals such as Bharti Airtel and Vodafone Idea continue to bleed, the state-run carrier was able to retain subscriber base on the back of competitive tariff.

However, the matter is hanging fire since the time when BSNL submitted a detailed project report in 2017 to acquire spectrum in the 2100 Mhz band worth nearly Rs 13,885 crore, and sought Rs 6,652 crore as equity infusion and wanted to meet the remaining cost through the deferred payment route in 16 annual installments.

Meanwhile, an interim finding of the Indian Institute of Management (IIM) Ahmedabad on the ‘BSNL revival’ pointed out that non-allocation of 4G to the state-run telco would result in further erosion of market share and revenue.

The Delhi-headquartered telco that currently offers 3G services on 2100 Mhz band airwaves believes that rolling out 4G with an additional five units could also help in utilisation of unused spectrum by offering contiguity.

Shrivastava added that upon necessary approvals, the telco would be able to launch high-speed 4G-Long-Term Evolution (LTE) services very soon, and has already initiated 4G pilot programs in Kerala and Karnataka, and is planning similar trial in Bihar on the 2100 Mhz frequency band soon.