PMO-driven BSNL, MTNL revival package hits a legal blockade

The revival strategy for the cash-strapped Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), driven by the Prime Minister Office (PMO) would require a ‘legal scrutiny’ from the Solicitor General of India, following which the Department of Telecommunications (DoT) would table the Cabinet note.

On Wednesday, Prime Minister Narendra Modi’s Cabinet has taken some of the big-ticket economic decisions while nearly 200,000 employees of the two stressed operators had to further wait for a much-needed relief package.

“The DoT is awaiting a legal vetting from the Solicitor General of India on whether the 4G spectrum can be allocated administratively to the two state-owned telecom service providers,” an official aware of the matter told ETT, adding that the Cabinet nod would only be taken thereafter.

In June this year, the then Cabinet secretary Pradeep Kumar Sinha-headed committee has already asked the telecom department to examine the legal bearing, following the proposed allocation of 4G radio waves to the state telecom carriers— BSNL and MTNL.

The high-level committee, according to a note seen by ETT, has then recommended that any executive arrangement for offering 4G frequencies to BSNL and MTNL may be considered only after examining the legal implications.

In 2012, the Supreme Court in its landmark verdict, while quashing the 122 licenses, noted that transferring or alienating the natural resources, the ‘state was duty-bound to adopt the method of an auction’ by way of a non-discriminatory method.

The department, in the absence of any legal view on the back of the apex court decision, is in no mood to take a foot forward to take the revised note to the Cabinet.

Query to telecom secretary Anshu Prakash did not elicit any response.

Last week, Principal Secretary to the Prime Minister Nripendra Misra chaired a meeting on the restructuring of the two sick telecom companies, and was attended by the Niti Aayog chief executive Amitabh Kant, Secretary— Economic Affairs Atanu Chakraborty and Secretary— Expenditure Girish Chandra Murmu.

Following the high-level meeting, the telecom department was tasked ‘to bring out a note incorporating the action plan for the approval’ by the Cabinet.

The availability of high-speed data spectrum to the two state-run carriers is an integral part of their rejuvenation even at a time when the private sector is closer to embrace 5G technology.

The administrative cost for the allocation of 4G airwaves to BSNL is pegged at Rs 14,000 crore and Rs 6,000 crore for MTNL.

The Narendra Modi 2.0 government, since taking over office in May this year, is aggressively seeking revival of both public telecom companies, and has reiterated its stand that the presence of a state-controlled operator in the sector would continue to be strategically significant.