Ahead of all allocations, the department has requested the PSU to submit a plan of activity on 4G support roll-out preparedness such as equipment procurement and also the capacity to finance the system update.
“We shall allot BSNL a few (5 Mhz) range for 4G support and therefore we’ve requested the company to submit a record of the 4G preparedness and the way they intend to secure equipment for it. In addition, we wish to be aware of the origin of the financing to the capex stemming from the 4G network growth so the funds allocated via the spectrum might be best used,” a senior DoT official stated.
The official added that the feasibility of spectrum to BSNL has an opportunity cost as, had been sold to personal telcos, the authorities might have earned earnings. “But we must confirm the PSUs. In exactly the exact same time we’ll track their preparation and gear and pre-launch preparedness too,” the official stated.
The official also stated that while the two BSNL and MTNL will be allocated to the 4G spectrum these questions are delivered to BSNL only rather than to MTNL. According to BSNL Board proposition, the price of the spectrum is at the assortment of Rs. 11,000 crore. In 2017, BSNL had delivered a board proposal searching for 5MHz spectrum at the 2100 MHz band, which it needed to partially fund by providing additional equity into the authorities.
The purchase of additional spectrum from the 2100 MHz band is virtually life saving for BSNL to get all-India rollout of 4G services throughout the long-term Evolution path to match contest. The DoT tracking and requirement for an action strategy report are targeted at ensuring that the funds are fully optimized to guarantee earnings returns to the authorities.
Another source said the government could stick to the IIM report whilst allocating 4G spectrum to BSNL. This will require approximately Rs. 1,875 crores of permit fee payment for five decades. This may be financed by equity injection from the authorities or by borrowing the same together with guarantee from the authorities, given the fiscal state of BSNL.
The report implied that the authorities should present conditions on BSNL when allocating the spectrum which BSNL should enter competitive tower leasing and sharing agreements with other telecom service providers to decrease the cost of rolling out 4G providers by BSNL. Rather than Rs. 11,000 crore requested for by BSNL to roll out 4G solutions, BSNL may be requested to re-examine the projected capital expenditure with tower-sharing and managed-services version.
The entire cost according to BSNL quotes are Rs. 9,600 crore. BSNL expects to cover half this amount through equity path (by issuing additional stocks to the authorities ) if permitted, and the remainder through revenue generated out of company.