Funding details to be submitted byBSNL
The Department of Telecommunications (DoT) is finalizing plans for allocating 5 MHz of 4G spectrum to BSNL shortly on 2100 MHz band. Before providing the allocations, the department has asked the Public Sector Undertaking(PSU)Company, BSNL to submit a plan of action on 4G service roll-outs. The plan should also include equipment procurement and the means to fund the network upgrade.
Plans for 4G preparedness
A senior DoT official stated, “We will allot BSNL some (5 MHz) spectrum for 4G services and for that we have asked the company to submit a report of their 4G preparedness and how they plan to procure equipment for that. We also want to know the source of their funding for the capex arising out of the 4G network expansion so that the funds allocated through the spectrum could be best utilized.” Further, he adds, “But we have to support the PSUs. At the same time we will monitor their planning and equipment and pre-launch preparedness as well.”
BSNL Board proposal details
According to the BSNL Board proposal, the cost of this spectrum will be INR 11,000 crore. In 2017, a board proposal was sent by BSNL for seeking 5MHz spectrum in the 2100 MHz band, which it wanted to partly fund by offering additional equity to the government.The securing of additional spectrum in the 2100 MHz band is nearly life-saving for BSNL for all-India rollout of 4G services through the Long Term Evolution road to match its competition.
BSNL’s 4G spectrumallocation period limit and its investment
Reportedly, the Indian government may trail the IIM report while allocating 4G spectrum to BSNL. The report had suggested that 5 MHz of spectrum in 2100 MHz band as 4G spectrum should be allocated to BSNL immediately but only for a limited 5-year period. The allocation may need around INR1,875 crore of license fee payment for 5 years. This can be financed by either equity injection from the government or by borrowing the same with a guarantee from the government, given the financial condition of BSNL.According to the financial condition of BSNL, the allocation is to be supported by either equity injection from the government or by borrowing the same with a guarantee from the government.
