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Department of Telecommunications seeks loan waiver for BSNL and MTNL

Department of Telecommunications seeks loan waiver for BSNL and MTNL

The Department of Telecommunications (DoT) has sought a waiver of Rs 1,450 crore as loan and interest for state-run Bharat Sanchar Nigam Limited (BSNL).

The Department of Telecommunications (DoT) has sought a waiver of Rs 1,450 crore as loan and interest for state-run Bharat Sanchar Nigam Limited (BSNL).

DoT has moved its recommendations to a group of ministers (GoM) headed by Finance Minister P Chidambaram in wake of revival plan initiated for BSNL and Mahanagar Telephone Nigam Ltd (MTNL).

Top officials at DoT said the fresh recommendations for the waiver will be discussed at the July 30 meeting of GoM along with the earlier recommendations for financial support to BSNL and MTNL especially related to Broadband Wireless Access (BWA) spectrum which amount to Rs 22,964 crore.

In a bid to revive the two ailing companies, the GoM is expected to waive off the one-time fees needed to pay to retain additional spectrum. The move is likely to impose a burden of Rs 12,000 crore on the national exchequer.

BSNL loss, as per unaudited results, stands at Rs 8,198 crore for 2012-13 compared to Rs 8,851 crore posted during 2011-12.

MTNL reported a widening of its net loss to Rs 5,321.12 crore for financial year 2012-13 compared to Rs 4,109.78 crore a year earlier.

Interestingly, the two companies were kept out of mobile services for a long while and were allowed to start these services only in 2002, eight years after private telcos had established their network.

BSNL and MTNL lost out badly to private firms between 2005 and 2010, when they were not allowed to import equipment for telecom infrastructure while private telcos prospered. DoT has also pitched for preferential treatment to the services of BSNL and MTNL in government and PSUs besides waiving loans on BSNL books.

The GoM had its first meeting in June after telecom minister Kapil Sibal wrote a letter to the Prime Minister Manmohan Singh raising concerns over the future of BSNL and MTNL.

In association with Mail Today