Govt May Auction Surrendered BSNL Broadband Spectrum

The government has "in principle" accepted a proposal from state-run Bharat Sanchar Nigam Ltd BSNL.UL to surrender wireless broadband spectrum in several telecoms zones and will look at auctioning it to other players, the telecoms secretary said.

If the proposal is approved, BSNL's fourth-generation wireless broadband spectrum could be made available to the highest bidder in India's ferociously competitive telecoms sector. The firm has spectrum in 20 of the country's 22 telecoms zones.

"That proposal was considered and in principle this is something which is considered as acceptable provided the details are worked out," R. Chandrashekhar told reporters, adding that the firm proposed giving up spectrum in a "substantial number" of zones.

BSNL spent 83.14 billion rupees last year on broadband spectrum after it was forced to match the highest bidder in a state-run auction that attracted much higher bids than expected.

The firm has told the government the price it paid for the spectrum in many of the telecoms zones is "not becoming a viable case" for it, Chandrashekhar said.

"The specifics will still have to be worked out," he said, when asked if BSNL would get a refund of the money it had paid.

BSNL, once India's top telecoms carrier, has lost market share to private operators in Asia's third-largest economy, and now ranks fifth by mobile subscribers and has made losses in the past two fiscal years.

Two slots of broadband spectrum in each of India's 22 zones were sold in the auction. State-run telecoms firms who were given an extra slot matched the highest bid price.

Mahanagar Telephone Nigam Ltd , India's other state-run carrier, was given spectrum in the two zones where BSNL is not present.

Reliance Industries, India's biggest listed company, bought the only firm to have won broadband spectrum in all 22 telecom zones. U.S. chipmaker Qualcomm, Indian mobile market leader Bharti Airtel are among firms that won broadband spectrum in some of the zones.

None of the spectrum winners have launched fourth-generation broadband services yet, with most of them looking at building fourth-generation (4G) networks based on the long-term evolution technology.