In a joint letter to Kapil Sibal, Minister of Communications and IT, the Cellular Operators Association of India (COAI) and the Association of Unified Service Providers of India (AUSPI) have expressed their reservations over the proposed bailout package for Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL), say news reports.

Prior to this, both companies had written to the Department of Telecommunications (DoT) requesting to surrender their broadband wireless access (BWA) spectrum, on grounds that it was an unviable business prospect for them. They also asked DoT to pay the one-time fee of Rs 100 billion imposed on operators holding more than 4.4 Mhz of GSM spectrum and 2.5 Mhz of CDMA spectrum, given their financial health. Both operators hold excess spectrum in all the circles they operate in.

Thereafter, DoT had planned to approach the Cabinet with the proposal to chalk out a Rs 200 billion bailout package for both operators.

Private operators have expressed their reservations on this subject and have stated that, “the consideration of any such proposal is not permissible as it will be in contravention of all tenets of policy, fair competition and level playing field.”

If the Cabinet approves DoT’s proposal, BSNL is likely to receive a refund of Rs 67.24 billion, while MTNL will obtain Rs 45.33 billion. In addition, the companies will be required to pay an upfront charge of Rs 16.26 billion and an annual fee of Rs 8.93 billion as a one-time fee for excess spectrum beyond 4.4 Mhz.