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MTNL Looking To Surrender Its BWA Spectrum: Report

State run telecom service provider Mahanagar Telephone Nigam Limited (MTNL) is looking to surrender its broadband wireless access (BWA) spectrum to get a refund of Rs 4,533.97 crore, reports PTI (via NDTV Gadgets).

The report states that this development was announced by MTNL Chairman and Managing Director A K Garg in a recent presentation to the Department of Public Enterprises (DPE) and that the operator is taking this measure as part of its revival plans to improve its existing financial condition and start making profits from March 2013.

MTNL currently has BWA Spectrum in Mumbai and Delhi Circles secured during the Broadband Wireless Access spectrum auction in June 2010. The operator had however posted a net loss of Rs 1093.7 crore for the quarter ending September 30, 2012 (Q2-FY13) and has been consistently posting losses since 2009-10.

Navratna Status: The report also stated that MTNL has requested the government to not withdraw its Navratna status, which is awarded by the government to profit-making Central Public Sector Enterprises (CPSEs). Navratna status allows CPSEs to make investments of up to Rs 1,000 crore in any single project without any government approval and provides them with greater operational autonomy to compete in the global market. However, the government withdraws the Navratna status from the company if it registers losses for two consecutive years.

MTNL had received the Navratna status in July 1997 and as of May 2012, Indian Government has awarded Navratna status to 16 CPSEs including Bharat Electronics Limited (BEL), Bharat Heavy Electricals Limited (BHEL), Hindustan Aeronautics Limited (HAL), Hindustan Petroleum Corporation Limited (HPCL), Mahanagar Telephone Nigam Limited (MTNL), Oil India Limited and Shipping Corporation of India Limited among others.

Selling Surplus Land: Besides surrendering the BWA Spectrum, MTNL also intends to earn revenue by selling residential and technical surplus land in Delhi and Mumbai, as indicated by the report.

Similar Developments: In October 2011, State owned BSNL was also reportedly looking to surrender its BWA(Broadband Wireless Access) spectrum in 17 circles to get a refund of Rs 8,313.80 crore and had apparently got the Department of Telecommunications (DoT)’s approval in December 2011.

Augere Wireless which had secured 20Mhz of spectrum in the state of Madhya Pradesh and had plans to roll out commercial LTE services under its under its ZOOSH brand, across 14 cities in Madhya Pradesh and Chhattisgarh, was also looking to sell its 4G spectrum and exit from the Indian market in May 2012. The company had then stated that it was unable to raise fresh funding from domestic and international investors due to regulatory uncertainty over the telecom sector. Earlier this month, an ET Now report had suggested that Airtel was in advanced talks to acquire Augere Wireless in a bid to secure additional 4G spectrum.

In May 2012, Bharti Airtel had also inked an agreement with Qualcomm, to acquire 49% stake in Qualcomm’s India entities that hold BWA/4G licenses in Delhi, Mumbai, Haryana and Kerala for an initial investment of approximately $165 million (Rs 909.56 crore approx). The Competition Commission (CCI) had approved the merger in September 2012 and Bharti was expected to assume complete ownership and financial responsibility for the BWA entities by the end of 2014.

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