According to reports, BSNL and MTNL between them, have paid Rs29,598 crore for pan-India spectrum. Though the two companies did not participate in the bid process for broadband wireless auction (BWA) spectrum, they had been allotted air waves nearly a year ago on the condition they would match the final bid price the private players would quote in the auction.
In a letter to the finance minister Pranab Mukherjee, communications and IT minister A Raja reportedly said that being public sector undertakings with social and governmental obligations, it was essential that BSNL and MTNL should not be burdened further with heavy financial obligations.
According to observers, though BSNL and MTNL enjoyed a clear first-mover advantage in 3G, they have not been able to capitalise on it with both preferring to go for outsourcing their 3G networks, instead of doing it by themselves.
MTNL had borrowed heavily to finance payment of spectrum charges and given the worsening financial position of the company it may not be able to service the heavy debt, A Raja added in his letter to the finance minister.
According to reports in the media, the finance ministry, however, was likely to turn down the request because a waiver to BSNL and MTNL could trigger similar demands from private players.
MTNL posted a Rs1573.76-crore net loss in Q4 March 2010, as against a Rs73.04 crore Q4 loss in March 2009. Net sales were down 20.6 per cent to Rs848.33 crore in Q4 March 2010 over Q4 March 2009.