Govt Puts BSNL On Call-Waiting Mode For 4G Loan

At a time when telecom operators in the country are on the verge of launching 5G services, the State-owned Bharat Sanchar Nigam Ltd (BSNL) is still awaiting allocation of 4G spectrum. Further, the operator still needs a ‘letter of comfort’ from the Department of Telecommunications (DoT) for taking a Rs. 5000-crore loan.

Last month, BSNL employees across the country went on a three-day strike (February 18, 19 and 20) demanding allocation of 4G spectrum and government approvals for the loan.

“Being a technology-driven company, 4G is important for BSNL’s journey forward,” a source close to the development told BusinessLine.

Both Mahanagar Telephone Nigam Ltd (MTNL) and BSNL don’t have 4G spectrum, though the latter is providing 4G services using new Base Transceiver Stations (BTS) in certain circles. The service is provided using 3G spectrum, but BSNL needs 4G spectrum to provide both 3G and 4G services simultaneously in an area covered by a single BTS.

The miniratna company had sought 4G spectrum in 2017 but is yet to be awarded. The government wants guarantees that the allocation of 4G spectrum would help in BSNL’s revival.

“Such an assurance is not possible as even the private operators providing 4G services are not making profits,” said another source. The rule that spectrum cannot be allotted to any operator on preferential basis and the fallout of the 2G scam had also impaired BSNL’s 4G plans.

Pending salaries

BSNL, which needs an immediate Rs. 5000 crore-loan for capex and opex – 2G, 3G and 4G rollouts, providing Fibre To The Home (FTTH) services and expansion of optical fibre among others – needs a letter of comfort (a government approval).

It is also awaiting a ‘preferential sanction’ (a government letter to the banks) for the loans.

BSNL is seeking about Rs. 2350 crore as interest on Broadband Wireless Access (BWA) spectrum and nearly ₹2,200 crore as excess payment taken by the DoT towards pension contribution from 2007 onwards, according to Sanchar Nigam Executives’ Association (SNEA) website. “The company is only seeking its dues; it’s not seeking any monetary assistance from the government,” another source said, adding DoT owes over Rs. 6000 crore to BSNL.

If these are released, BSNL can emerge as a major player in telecom sector again, even as it is expecting February salary to be credited before March 20. It’s also expecting flow of cash this month, with many State government offices expected to settle their bills before the end of the financial year.

A report by Kotak Institutional Equities said BSNL had missed paying February salaries.

5G-ready

Not to be left behind, BSNL has signed agreements with infrastructure and content providers including Nokia and Ericsson for 5G services.―The Hindu Business Line