TRAI Gets DoT Reference on BSNL 4G Spectrum Allocation

The telecom regulator on Tuesday said it has received the government's reference on 4G spectrum allocation to BSNL and will soon start the consultation process.

"TRAI will soon hold consultations on 4G spectrum allocation to BSNL, we have received the reference some days back," TRAI Chairman R.S. Sharma told the media on the sidelines of an event by ICEA-KPMG on Open OS system.

IANS had first reported the story on March 17 that the DoT has referred the BSNL spectrum issues to TRAI seeking its opinion on allocating 4G spectrum to the state operator.

The Telecom Regulatory Authority of India (TRAI) will cover a number of issues under its consultation including whether the PSUs should be given spectrum outside auction (since they do not bid along with private operators) and also on the issue of allocation of administrative spectrum, price and quantum of 4G spectrum to BSNL.

The BSNL currently has 5Mhz of spectrum on 800 Mhz band. But for an all-India scaling-up of the 4G service roll out, it needs at least a cumulative 10Mhz radiowaves. In Rajasthan, the PSU will use 4G spectrum which it has on 800 Mhz band as per the plan.

Sources added that the Department of Telecommunications (DoT) will abide by whatever views TRAI will give "but let's see what the regulator says".

Digital Communication Commission, the inter-ministerial panel, had advised DoT to take the comments of TRAI on this issue in view of the Supreme Court judgement that spectrum cannot be allocated to telecom service providers without auction and also on the quantum and price.

The BSNL, which operates all over India sans Delhi and Mumbai, has been seeking 5Mhz of 4G spectrum on 2100 Mhz band for which it had sent a proposal approved to DoT. It intends to acquire 4G spectrum worth about Rs. 13,885 crore.

The mechanism suggested by BSNL is: 50 per cent payment will be done upfront and remaining will be made in 10 equal instalments. The upfront payment that BSNL wants is to be met through the equity route where government will be given preferential equity in lieu of the spectrum valued at Rs 6,942.5 crore.

TRAI's views may take at least one-and-a-half months, sources said, adding thereafter it will be easier for the DoT to convince the Finance Ministry if TRAI gives go-ahead for this move. The Finance Ministry has been seeking the usefulness of such huge capital infusion in BSNL, so has the Niti Aayog.

The BSNL currently going through its worst financial crisis has recently sought government's support to pay February salary of its employees. The company is banking heavily on the TRAI's positive comments.

A draft report of IIM-Ahemdabad also suggested to the government to give 4G spectrum to BSNL to survive in the hyper competition.

BSNL offers 2G and 3G services and has 11 crore mobile subscribers and gets a number of government projects from which it draws revenues. But post Jio entry in the sector, cut-throat competition has made private telcos lose profits and consolidate to survive.

Keeping BSNL afloat has become more challenging with the absence of a full bouquet of services. After Jio, it is the only operator which has been adding subscribers but not enough to generate revenues since these subscribers are from low voucher category.

For the year 2017-18, the PSU posted a loss of about Rs 8,000 crore.