BSNL offers to surrender BWA spectrum in 17 circles | business | Hindustan Times
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BSNL offers to surrender BWA spectrum in 17 circles

business Updated: Oct 17, 2011 18:59 IST

At a time when private operators are scrambling for more spectrum, loss-making state-run BSNL has offered to surrender its Broadband Wireless Access (BWA) spectrum in 17 circles, seeking refund of Rs 8,313.80 crore.

"BSNL has written a letter to Department of Telecom (DoT) offering to return BWA spectrum in 17 circles. (It) wants to retain only Maharashtra, Andhra Pradesh, Gujarat and Haryana service areas," a source from the DoT said. BSNL is understood to have registered a loss of over Rs 6,000 crore for 2010-11, mainly due to high staff cost and payments made for acquiring 3G and BWA spectrum.

Last year, BSNL had paid over Rs 8,500 crore to the government as spectrum charges bidding for the BWA auction, and was allotted non-standardised band of BWA spectrum for 21 circles. "The letter stated that BSNL was allotted non-standardised band of BWA and can't be put in use, so the company wants to return. The department will now take a look and may consider an option to re-auction the spectrum also if possible," the source added.

Earlier, the PSU had floated a tender to allow franchisees to run services on revenue share basis, which came under DoT scanner due to irregularities found in allotting BSNL's WiMAX franchisee.

The employees unions of state-run BSNL had asked the government to refund over Rs 8,313 crore paid by the PSU for acquiring non-standardised Broadband Wireless Access (BWA) spectrum.

BSNL has been facing severe financial pressure as its losses have more than tripled to about Rs 6,000 crore during 2010-11, mainly due to hefty outgo for employees' salary and expenses borne by the PSU for procuring 3G and BWA spectrum. The company had registered a net loss of Rs 1,823 crore during 2009-10. BSNL had reported the highest net profit of over Rs 10,000 crore in 2005-06, but since then its profits have been falling and in 2009-10 it reported net losses.

More than 47 per cent of the total income of the company goes for the payment made to the BSNL's employees.

The company is already preparing a voluntary retirement plan to employees as part of its efforts to revive the loss-making company.

The company has set an internal target of 99,700 employees - comprising Group A (1,483), Group B (6,262), Group C (76,655) and Group D (15,214) staffers.

The VRS has been under discussion since 2009 when a panel headed by Sam Pitroda, adviser to the Prime Minister on Public Information Infrastructure and

Innovations, advocated that BSNL take the VRS route to prune its nearly 2.77 lakh strong workforce by a third.

BSNL's liability for the proposed VRS is pegged at a modest Rs 2,700 crore, while the telecom department will shoulder nearly Rs 18,000 crore.