State run telcos BSNL and MTNL have finally got an approval from the Union Cabinet to surrender their Broadband Wireless Access (BWA) spectrum, in a bid to improve their existing financial condition.

In a press briefing, Information & Broadcasting minister Manish Tewari said that this refund is being provided as part of the revival package for telcos and will be done over a period of time. He added that this refund will also help these telcos to meet basic financial commitments such as operation and maintenance of their respective telecom networks.

BSNL Surrenders BWA Spectrum in 6 Circles, MTNL Surrenders in 2

BSNL has surrendered BWA spectrum in six of the twenty circles (Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Kolkata) for which it will be receiving a partial refund of 6,724.51 crore while MTNL has surrendered BWA spectrum in both the circles (Mumbai and Delhi), for which it is receiving full refund of 4,533.97 crore.

Earlier, BSNL had paid Rs 8,313.80 crore to acquire BWA spectrum in 20 circles while MTNL had paid Rs 4533.97 crore to acquire spectrum in two circles. Note that both the telcos had not participated in the 2010 BWA spectrum auctions, although they had been allotted spectrum and directed to match the price paid by successful bidders.

Reports had suggested that BSNL had been looking to surrender its BWA spectrum since October 2011 and had received the Department of Telecommunications (DoT)’s approval in December 2011 while MTNL had reportedly been looking to surrender its broadband wireless access (BWA) spectrum since November 2012, so as to improve its existing financial condition and start making profits which it hasn’t for the past 16 consecutive quarters.

This spectrum surrender had also been recommended to the Union Cabinet last year by the ministerial group setup to formulate short, medium and long term measures to revive BSNL and MTNL.

Surrendered Spectrum To Be Auctioned: DoT secretary M F Farooqui said that the government will now be auctioning the surrendered spectrum, although it hasn’t decided on the auction timeline yet.

BSNL & MTNL Financials: Facing stiff competition from private players, both BSNL & MTNL have been struggling financially for the past few years. While BSNL had reported Rs 7,884 crore loss in FY13, MTNL had reported a net loss of Rs 5,321 crore for the same fiscal. This was the fourth straight loss making fiscal for both the telcos.

Other BWA Developments

Earlier this month, Aircel had appointed ZTE Corporation for pan-India deployment of its 4G LTE network, although it hadn’t disclosed any information on the commercial launch of its 4G services.

As of today, Airtel is the only telecom operator which has launched 4G service in India, offering the service in six cities – Bangalore, Kolkata, Pune, Chandigarh, Panchkula and Mohali. It had also stated plans to launch 4G LTE services for smartphones later this month. Whereas, Reliance Jio which is the only player to have pan-India BWA spectrum, continues to sign 4G partnerships with no signs of commercial launch yet. Maybe, 2014 is the lucky year.