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

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.