The Hindu Business Line : DoT approves `bonanza' for BSNL

IN what should come as a big relief for telecom behemoth Bharat Sanchar Nigam Ltd. (BSNL), the Department of Telecommunications (DoT) has cleared a financial package of measures that include the full reimbursement of its licence fees and spectrum charges till the year 2006-07.

According to official sources, the package estimated to total Rs 18,000 crore during the five-year period follows the plea made by BSNL that it ought to be adequately compensated for its unremunerative services across the country. More so, with the increasing competition from private operators who are concentrating their services in the lucrative circles.

At the time of its corporatisation on October 1, 2001, BSNL had been promised fiscal incentives only till the end of this fiscal.

The `relief' package has now been forwarded to the Union Cabinet for approval, since it involves a significant outgo from the Consolidated Fund.

As per the package, apart from being fully reimbursed the licence fees and spectrum charges till the end of the Tenth Plan period, the amount of Rs 2,300 crore that has been budgeted for this year will also be suitably adjusted to the actual licence fees and spectrum charges.

The relief is to be provided as an annual grant and is to be utilised by BSNL exclusively for its rural operations.

The package also includes waiver of spectrum charges in rural areas, and a moratorium on repayment of principal and interest on Government loan to BSNL to continue till 2006-07. It further provides that the equity included in the capital structure of BSNL should be subjected to a dividend of not more than 10 per cent till 2006-07.

"The compensation of Rs 720 crore for investment by BSNL in village public telephones during 2001-02 may be provided as a loan in perpetuity. The terms are to be decided separately by DoT after discussions with the Ministry of Finance'', the finalised package notes.

That apart, BSNL will be exempted from payment of space segment charges to the Department of Space, on the lines of a similar exemption granted to Prasar Bharti.

In regard to the burden of pension of retired DoT employees which presently has been placed only on BSNL, it has noted that in the past, about Rs 1,000 crore used to come into the revenue stream of DoT through dividends of MTNL and licence fee of MTNL and VSNL, which are now getting credited to the Ministry of Finance in the Consolidated Fund.

"Earlier, DoT was discharging the pensionary liabilities from the revenue stream, which included the above inflows. This matter needed to be considered in this light in order to reduce this financial burden and for making more resources available to BSNL for investment in the telecom sector. The pension of retired and due to be retire DoT employees should be met out of the dividend payment by MTNL and BSNL deposited in the Consolidated Fund'', the DoT noted.

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