Having pointed out that stiff competition in mobile segment, high employee cost and absence of 4G services in a data-centric telecom market is eroding the competitive strength of state-owned telecom companies Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), Minister of Communications Ravi Shankar Prasad said Friday that the government is preparing a revival package for the two public sector firms. He added that one of the proposals being looked at, was the companies launching 4G services. Currently, neither of BSNL or MTNL have spectrum to deploy 4G. “We will make a very focused attempt for revival of BSNL and MTNL and very soon we will be moving a Cabinet note. There are three reasons for this initiative — firstly, these two companies are a national asset, they operate in strategic areas that concern defence and home affairs, and lastly they are at the forefront of giving free services at time of natural calamities. A revival package is being worked out to make them more competitive and we will try to ensure that there is least pressure on the government,” Prasad told reporters. “I would appeal to the employees of these companies to be cooperative, professional and learn to live in today’s competitive world. Our government supports competition, some element of disruption does come but we must appreciate the benefits of competition. I have noted some consolidation in the sector and that is a natural process . but my government will ensure that competition is fair now,” he added. It is learnt that to prepare the revival package for the two telecom public sector undertakings (PSUs), the Department of Telecommunications (DoT) is looking at the recommendations of IIM Ahmedabad and Deloitte that were mandated to prepare a report on revival of the two companies. For allocation of 4G, the report had noted: “.there is the opportunity cost of 4G spectrum, additional capex for 4G roll-out and risk of continuing with business-as-usual attitude. On the other hand, non-allocation would result in further loss of market-share, revenue and loss of morale among the employees. On balance, we recommend that 4G spectrum may be allocated for five years conditional on BSNL addressing the issues related to manpower, real estate monetisation/utilisation and improvement in market-share/operating performance”. Notably, BSNL steered clear of the 4G technology when most operators were rolling out the service, citing high investment costs. However, in the recent months, the service provider has launched 4G in some locations across the country. Both BSNL and MTNL had also requested the government for the allotment of spectrum in 800 MHz, 1,800 MHz and 2,100 MHz bands for providing 4G services in different service areas. However, considering the Supreme Court judgment in the 2012 2G case, the DoT has referred the matter of administrative allocation of spectrum to the Solicitor General of India for his opinion.
