Help is at hand for Bharat Sanchar Nigam Limited (BSNL). After several rounds of discussion with the Department of Telecommunications (DoT), the Telecom Regulatory Authority of India (TRAI) has said that the ailing incumbent should be provided a subsidy of Rs 6 billion, say news reports.
However, the regulator has clarified that the subsidy is an ad hoc arrangement and another round of consultation will take place before final recommendations on this subject are made.
This amount is expected to help the company sustain its loss-making rural wireline operations.
Prior to this, BSNL had asked the Universal Services Obligation (USO) Fund administrator for an annual sum of Rs 10-Rs 15 billion to operate connections in rural areas on grounds that they were economically unviable. The operator had thus requested the USO Fund for support in lieu of the decision to abolish access deficit charges.
However, the USO Fund administrator has said that the subsidy cannot be given to a single operator. An internal USO Fund note stated, ?The USO Fund is not in favour of any form of generalised support for rural wireline exchanges, as this would not necessarily lead to optimum utilisation of the wireline.?
?Subsidy disbursement has to be related to concrete improvements in rural infrastructure and services, and cannot be used to fund deficits of a specific operator,? it added. BSNL had projected an annual deficit of Rs 93 billion due to rural phone connections. It offers services at a lower rate to meet the government’s social obligations.
However, at that point, TRAI was yet to give its opinion on the subject.
