BSNL, MTNL seek Government nod to enter into cable TV, broadcasting

A Group of Ministers is expected to consider a DoT proposal Friday that may clear the way for state-owned telecom firms, BSNL and MTNL, to venture into cable TV and broadcasting services to help infuse life into the loss making companies.

The Department of Telecom (DoT) is learnt to have forwarded several suggestions to the Group of Ministers, headed by Finance Minister P Chidambaram, that include BSNL and MTNL entering cable TV and broadcasting services, according to official sources.

They said DoT has sought the GoM nod for "exploring new business opportunity being created by the convergence of services and networks across telecom (value-added services and Internet telephony), information, cable TV and broadcasting media services".

The GoM on revival of the two PSUs is scheduled to meet for the first time tomorrow to discuss the proposals and its recommendations will be placed before the Cabinet for a final decision.

BSNL losses, as per estimates, are expected to be about Rs. 8,198 crore, and MTNL's around Rs. 3,300 crore for the financial year 2012-13.

Sources said DoT has also proposed to the GoM to provide financial support to BSNL and MTNL for retaining airwaves beyond the initial quantity that was allocated to them for mobile and other wireless services.

The government has decided to charge one-time spectrum fee for airwaves held by operators beyond the initial allocation for starting mobile services.

One-time fee for BSNL's GSM spectrum amounts to around Rs. 6,912 crore and MTNL Rs. 3,205 crore.

The GoM may also consider the proposal of the two companies to surrender wireless broadband spectrum. BSNL and MTNL were asked to pay Rs. 8,313.8 crore and Rs. 4,533.97 crore, respectively, on June 20, 2010, for the airwaves that are being currently used to provide 4G services.

That apart, DoT has sought GoM's nod for implementing voluntary retirement scheme in both the PSU's for 1 lakh BSNL employees and 20,000 employees in MTNL.

Overall, the salary and pension expenses of MTNL employees form 103 percent of the company's revenue, and for BSNL it is 49 percent.

DoT will also seek GoM's nod to discharge MTNL's pension liabilities by paying lumpsum amount of around Rs. 5,925 crore.

The Department will ask GoM to consider providing preferential treatment to both the state-run telecom firms in telecom services used by government departments and other public sector units.