The Department of Telecommunications (DoT) is expected to give Bharat Sanchar Nigam Limited (BSNL) a grant of Rs 23.95 billion to enable the operator to complete the rollout of its wireless broadband services. In October 2010, BSNL had informed DoT that it would continue building wireless internet services across rural India only if an additional grant of Rs 23.95 billion was given to support this unviable business.
According to the operator, rolling out services on the rural Wi-Max project on a no-profit/loss basis without adequate financial support was unviable. Thereafter, DoT, in a communication dated 16 November to BSNL had asked it to rework its estimates for the Wi-Max initiative and spread the costs associated with the project over a 20-year time frame. It added that the additional spectrum cost of Rs 16.62 billion must not be front loaded as this resource can be used over two decades.
BSNL has also been asked to scale down its projections that 5 per cent of its total revenues from this service would be incurred towards distribution and 2 per cent towards marketing. It has also been asked to work out infrastructure sharing deals with other operators to lower costs. The project is divided into three parts, and under phase-I about 1,000 towers for Wi-Max are to be set up, followed by 6,863 units in the second phase.
So far, the Department of Information Technology has agreed to provide subsidies to the tune of Rs 7.10 billion for the two phases, Rs 1.60 billion for setting up the first 1,000 towers and Rs 5.50 billion for the remaining. However, BSNL has said that it can support a maximum of 1,798 towers with this level of funding.
