The Department of Telecommunications (DoT) has asked Bharat Sanchar Nigam Limited (BSNL) to submit its 4G roll out status report which would also include equipment procurement and the means to fund the network upgrade.
The DoT needs this information as it is finalising plans for allocating 5 MHz of 4G spectrum on the 2100 MHz band to BSNL. Moreover, it also wants to know about the source of funding for the capex arising out of the 4G network expansion so that the funds allocated through the spectrum could be best utilised.
The acquisition of additional spectrum in the 2100 MHz band could be beneficial to BSNL for all-India rollout of its 4G services through the long term evolution route. As per BSNL estimates, the total cost of this spectrum would be around Rs 96 billion. It expects to pay half of this amount through equity route (by issuing additional shares to the government) if allowed, and the rest through revenue generated from business.
However, the 4G spectrum allocation through the equity route and government funding has faced opposition from the Finance Ministry and National Institution for Transforming India (NITI) Aayog, who see no return on this investment.
As a result, the DoT’s demand for an action plan report are aimed at ensuring that the funds are fully optimised to ensure that the revenue returns to the government.