Should Govt run BSNL/MTNL be given 3G and Broadband Wireless spectrums for FREE ? Refund 30,000 Crore ??

By Manoj Govindassamy on 20 July, 2010, 1:20 pm

A week back, Union Telecom Minister A.Raja requested the Finance Minister Pranab Mukherjee to provide the telecom Public Sector Units (PSUs) like BSNL and MTNL with FREE spectrum for 3G and Wireless broadband access (BWA) services.

And, the reason cited was that these companies wouldn’t afford such a BIG spectrum fee. Also, Raja claims that BSNL/MTNL is the only telecom provider connecting the remote rural areas in the country and needed some special considerations.

Now, joining hands with the telecom minister are the employees of these PSUs demanding for the same special consideration and urging for the total refund of the spectrum fees paid. BSNL and MTNL together have paid around 30,000 crore for the country wide 3G and wireless broadband spectrum. BSNL employees have threatened to go on strike if the government fails to refund part of fees paid by the company, which is around 18,500 crore.

Now, here are our opinions on whether these PSUs should be given special consideration and if the Govt., should refund the spectrum fees of around 30,000 crore paid by them.

1. Government should NOT refund spectrum fee to BSNL/MTNL, because :

a. It could spoil the fair business platform in the country

b. If BSNL and MTNL are to be given totally free spectrum, then these PSUs might come up with totally ridiculous mobile/broadband plans without worrying about the return on investments which could kill the new telecom operators and their innovations, improved services, etc.,

c. BSNL and MTNL are continuously losing their subscribers. They just failed to withstand the competition. Poor management, improper planning, outdated tariff schemes, terrible customer support, unskilled staffs, etc., are well known reasons behind their poor show. If the same were to continue, these PSUs would run into losses in a few years time. So, asking for a refund of the spectrum fees paid is like asking for a bail out. Just ahead of time, IMHO.

d. Though they were given the 3G license well ahead of others, these early birds were too lethargic to woo new subscribers. So, financial adjustability is like injecting more sleeping pills to these PSUs.


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2. Government CAN refund full/part of spectrum fee paid by BSNL/MTNL, because :

1. Deep pocketed private telecom operators and the foreign backed telecom entities pumped in more money into the market, making the spectrum bidding expensive and unrealistic for the time. Though BSNL/MTNL were allotted spectrum licenses without having to participate in the bidding war, they were mandated to pay the fees equivalent to the winning bids in all the telecom circles. Mean, these PSUs paid (forced to pay) steeper fees for the allotted spectrum licenses for which the government tagged prices were too less. Shouldn’t the government run companies be insulated from these unrealistic bidding wars ?

2. May BSNL/MTNL be refunded the spectrum license fee and these companies might bring in very cheap /free 3G/broadband services which could trigger a new telecom revolution in the country ?

Whats your stand ? Should 30,000 crore spectrum fee be refunded to BSNL/MTNL ? and, why so ?

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Categories: WTF | india.gov

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