You are here: ET Home » News » News By Industry » Telecom
click here

BSNL likely to get Rs 6,000 crore package for Naxal-area rollout

Economic Times FacebookEconomic Times TwitterEconomic Times RSSEconomic Times Newsletter
The Economic Times
KOLKATA/NEW DELHI: State-owned BSNL may get nearly Rs 6,000-crore support from the Centre for rolling out and maintaining mobile networks in the country's naxal-prone territories across nine states to bring the multitude of left wing ultras in the cellular loop.

The Telecom Commission, the highest decision making body of the communications ministry, will meet on Thursday to consider BSNL's demands for Rs 5,809.38-crore support over a five-year period for building and operating close to 2200 towers in naxalite hotbeds. It will also consider another proposal by sector regulator Trai to provide BSNL with Rs 2,750 crore over a two-year period to run its subsidized wireline services in rural India.

With naxal-affected areas being commercially unviable for private operators, the telecoms department has recommended that BSNL be awarded the project without having to participate in the bidding process. It has further told the TC that awarding the project to BSNL without an open bidding process was being proposed keeping in view the security requirements of the country.

But any move to award a project to BSNL, bypassing the bidding process, will entail an amendment in the Indian Telegraph Act, especially since the proposed rollout in naxal zones will be subsidized by the Universal Services Obligation Fund.

Since all mobile phone companies share 5% of their annual revenues towards the USOF corpus, under the present Indian Telegraph Act & Rules, BSNL is required to participate in an open tender to qualify for such subsidy. In fact, BSNL had earlier opted out of the venture after the USOF Administrator had dismissed its plea for 100% subsidy support on a standalone basis.

But in light of the latest security requirements, if the TC takes a favourable view, the telecoms department is likely to seek cabinet nod to expedite the project.

If all clearances come through, the proposed Rs 5809.38 crore subsidy out of the USOF proceeds will meet the state-run telco's opex and capex requirements for the proposed mobile rollout in the naxal zones.

It is understood that the government has accorded highest priority to extend mobile coverage across select naxal-prone districts in Chhattisgarh, Jharkhand, Orissa, Andhra Pradesh, Bihar, Maharashtra, Madhya Pradesh, West Bengal, Orissa and Uttar Pradesh. Several of these pockets have over the years borne the brunt of Maoist strikes on mobile infrastructure and OFC routes.

At present, there are 37,185 villages that remain outside the mobile loop. Of these, 5620 villages have zero population, 23,661 villages have a maximum population of 500-odd and the remaining 5,749 villages have a population between 501 and 1,000.

As far as subsidising BSNL's loss-making rural landline operations is concerned, it may be mentioned that trouble began for the telco after the government suspended its Rs 2,000-crore annual subsidy payouts last year.

The Telecom Commission had originally provisioned a payment of Rs 2,000-crore annual subsidy for three years out of the USOF to support BSNL's rural wireline operations, starting July 2008. This was aimed to compensate the telco, which lost out on access deficit charges three years ago.

The annual subsidy payout was stopped last year by the USOF Administrator as there was no instruction from the telecom department to renew it beyond three years for supporting its rural landline operations.
Download ET's mobile applications for iPad, iPhone, Android, BlackBerry, Nokia and Windows Phone to track news as it happens, live stock quotes, monitor portfolio, get market stats like gainers, losers and movers & much more. To check out free Economic Times apps , Click here
For Telecom news updates, follow ET on Twitter
Do you like this story?
DoT to press for 17% increase in 2G base price above Trai's proposed rate
DoT has concluded that reserve price for 2G airwaves should be revised to Rs 4,245 crore per unit (pan-India basis) vs Trai's proposal of Rs 3,622 cr.
ARPU data shows spectrum price in India costlier than other nations
The reserve price for spectrum bids suggested by the telecom regulator is exorbitant compared with what carriers in the West paid, according to an ET analysis.

There are no comments on this article yet.
Why don't you post one?
Comments are moderated and will be allowed if they are about the topic and not abusive.

Characters remaining (1500)

To post this comment you must log in.
Log In/Connect with: Log In with FacebookLog In with Twitter
More Login Options

Fill in your details:

Will be displayedWill not be displayed

Will be displayed

Share this Comment:
  Post to Facebook
  Post to Twitter
Please answer this simple math question.

8 + 1 =
Corporate News
How Maruti has made Algeria its largest export market for small cars
Buyers were mostly the well-heeled, who preferred big cars. We took a contrarian view and began targeting people who didn't own a car, says marketing head Pareek.

Why Punsari village in Gujarat puts metros to shame!

How Maruti has made Algeria its largest export market for small cars

How Neel Pujara makes money by offering US stocks to Indian investors

How will the rupee's fall affect you?

Three years of UPA-II: Scams, policy paralysis & economic mess

Five tips for credit card beginners

How to make the most of your home wi-fi network

Buying a property? How to arrive at an offer price

Mark Zuckerberg's post-IPO wedding is smart legal move


Slide Shows

1 / 6more »
What are the strategies used in debt funds
Here is a list of approaches adopted by managers of debt funds to maximise the returns.
What are the strategies used in debt funds
Time to tap your own enterprise to make wealth
To earn, save, plan and systematically invest is the traditional approach to enhancing wealth.
Time to tap your own enterprise to make wealth
Buying a property? How to arrive at an offer price
Find out the prices of similar houses in the area to help negotiate a better deal while buying a property.
Buying a property? How to arrive at an offer price
How to ensure adequate protection before starting with investments
It is important for him to secure his income and savings against emergencies.
How to ensure adequate protection before starting with investments
Should you invest in MNC stocks now?
These stocks exhibit a steady performance and have the ability to tide over economic downturns.
Should you invest in MNC stocks now?
How will the rupee's fall affect you?
Rupee fall can affect your investments to spending and savings. Prevent your finances from falling into disarray.
How will the rupee's fall affect you?
ET Mobile
Get Economic Times on the go. Get your portfolio updates by the minute
ET ePaper
Get a replica of your favourite edition of ET and feel at home.

Government mulls shifting to dynamic levy for sugar to unclog mill stocks

» Read more