business

Updated: Mar 13, 2018 23:16 IST

The Standing Committee of Information Technology has asked government to allocate 4G spectrum to state-run telecom firm BSNL and MTNL at the earliest to help them compete and survive in the market.

“The Committee is of the view that both BSNL and MTNL will lose the data market, if they are not given 4G services soon. To compete and survive in the telecom market, the Committee feels that 4G spectrum should be given to them at the earliest,” the committee, chaired by BJP MP Anurag Singh Thakur, said in its report tabled in Parliament today.

MTNL and BSNL have submitted proposals for allotment of spectrum with government support for launching 4G services in the telecom circles where they operate.

BSNL operates in 20 telecom circles of the country while MTNL has operations in remaining 2 telecom service area- Delhi and Mumbai.

Both the state-run firms have requested for 5 Mhz block of radiowaves in 2100 Mhz band in the service area where they operate and the proposal is under consideration of the Department of Telecom.

“The Committee have been informed that Hon’ble Minister (Manoj Sinha) had declared on the floor of the House that government is shortly going to take a final decision in the matter and the department is actively considering giving 4G spectrum,” the report said.

It is also expected that allotment of 4G spectrum to BSNL and MTNL against equity infusion will contain their negative growth in the wireless and broadband segments.

The panel noted MTNL is under severe debt burden.

As on December 2017, the outstanding debt of MTNL is Rs 16,870.40 crore and for BSNL, the figure is Rs 9,000 crore.

For the year 2018-19, the projected revenue and expenditure of BSNL is Rs 28500 crore and Rs 35850 crore, respectively.

The panel asked government to consider voluntary retirement scheme submitted by the PSUs at the earliest to help them improve their cash flows.

For MTNL, the company incurs more than 76% of the revenue on staff cost as opposed to 4 to 6% by private sector.

“...the Committee is of the view that revival of MTNL will involve significant reduction in staff cost. Granting of VRS to 5312 employees, i.e., 20 % of the staff retiring in next 10 years is expected to reduce staff cost by 20% thus improving negative cash flow,” the panel said.