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Home > Business > Business Headline > Report

BSNL to seek licence fee waiver afresh

Debjoy Sengupta in Kolkata | June 04, 2003 11:49 IST

The state-owned Bharat Sanchar Nigam Ltd will make a fresh appeal to the Centre to waive licence fees and spectrum charges.

Prithipal Singh, chairman and managing director, said, "We will make another round of appeal to the government for allowing us the licence and spectrum charge waiver, in the absence of which our bottomline will be severely battered."

"There are few areas which the government should reconsider before denying the licence fee reimbursement. We will try and explain the pros and cons," Singh added.

BSNL had earlier said that full reimbursement of licence fee and spectrum charges should be made available beyond 2002-03 for the full 10th plan period and to reimburse fully without imposition of any cap, as grant to be utilised exclusively in rural areas.

Over and above this, BSNL incurs huge losses on providing telephony in unviable rural areas, 50 per cent of which are loss making.

The finance ministry has said that any loss incurred by BSNL on rural telephony should be met strictly from the proposed Universal Service Obligation fund since waiver of licence fee will mean an uneven playing field for private operators.

Officials, however, said BSNL has not been reimbursed anything for its investment in rural telephony from the USO fund.

BSNL will have to shell out around Rs 23,000 crore (Rs 230 billion) as licence and spectraum charges till 2006-07 for which it had asked for a waiver. But the Union Cabinet turned down the proposal.

For 2003-04, the estimated outgo for licence and spectrum is estimated at Rs 3,200 crore (Rs 32 billion). The rejection of the department of telecommunications plan to grant a moratorium on payment of principal and interest on a loan of Rs 7,500 crore (Rs 75 billion) is further expected to compound the telecom major's woes.

In the recent past, the government has also declined to foot the telecom major's pension bill of around Rs 1,000 crore (Rs 10 billion) a year.

The company will, therefore, have to shell out an excess Rs 4,200 crore (Rs 42 billion) plus interest on the Rs 7,500 crore (Rs 75 billion) loan, thus eliminating any surplus after the deduction of expenditure.

Officials from BSNL's finance division said the company is expected to earn Rs 24,000 crore (Rs 240 billion) as total revenue, and incur Rs 20,000 crore (Rs 200 billion) as expenditure, excluding new items.


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