BSNL, MTNL ask government to bear Rs11,000 crore for additional spectrum

State-ownd telecom operators Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) have asked the government to bear the entire burden of nearly Rs11,000 crore they need to fork out as one-time payment for additional spectrum.

In separate letters to the department of telecommunications (DoT),  the two companies said they were in serious financial trouble and did not have the money required, though they needed additional spectrum to ''serve their customers''.

According to analysts, the move by the two public sector telecom giants could end up throwing the government's plans to earn around Rs40,000 crore this financial year from one-time fee for additional spectrum with incumbent players and the 2G spectrum auction, out of kilter.

The two PSUs were expected to contribute a substantial portion of the Rs27,000 crore the government expected to net in one-time fee from incumbent operators with over 4.4 MHz of GSM spectrum (and more than 2.5 MHz CDMA spectrum). The payment would be required to be made prospectively.

The empowered group of ministers (EGoM) on telecom took the decision during its last meeting on 8 October.

Endorsing the demand, the DoT has decided to put the ball in the court of the said EGoM, headed by finance minister P Chidambaram, adding that in view of the financial difficulties faced by the two PSUs, it would put up a request for in-principle approval from the EGoM and then from the cabinet for financial support to both PSUs.