Loss making telco MTNL tells DoT its licence ends only by 2021

Chennai: State-owned telecom service provider Mahanagar Telephone Nigam (MTNL) that is currently reeling under loss might well escape the 6 April that would need the company to pay around Rs 11,000 crore.

The renewal amount, according to the company need only be paid after two years, in 2021, and not by next month, state reports.

Looking for a breather, MTNL has written a series of letters the department of telecommunications (DoT) admittedly about the renewal of its 20-year licence, and reports note that the telco has raised a technical point, where it says the year of licence allocation to it should not be taken as 5 April, 1999 but 11 January, 2001.

Thus, the firm states the renewal should come up in January 2021 only as it received its cellular mobile licence only then. It has also sought the legal opinion of Additional Solicitor General, Vikramjit Banerjee, for cementing its proposal.

Chairman and MD, MTNL, PK Purwar, in a recent letter to DoT Secretary Aruna Sundararajan, said in 1999 its licence was “non-standard” and became “standard” and “at par” with private operators in terms of geographical coverage only since 11 January 2001.

It must be noted that MTNL commenced its operations in Delhi and Mumbai in 1999, where it enjoyed a monopoly until telecom services were given to private entities. The telco states that in the first two years of operations, it only used a basic service licence.

“It is the unique and only case in entire telecom licensing regime where CMTS licence is granted with non-standard operating area as per restricted basic service licence geographical area in deviation of prescribed and defined standard licence area laid down under CMTS licence regime,” MTNL’s letter to the DoT read.

The basic service licence was for landline services. The firm also started mobile services under it but its service area was restricted to just Delhi and not the national capital region (NCR). The telco also had its operations in the island nation of Mauritius.

If the government does not accept MTNL’s request and see its logic, the telco has said it has no option rather than to shut its services.

“Non-correction of effective date of MTNL’s CMTS licence to 11.01.2001 will ultimately result in closing down of services beyond 05.04.2019 to MTNL mobile subscribers and in-roamer customers of BSNL. In order to continue providing uninterrupted mobile services, the extension of MTNL’s CMTS licence along with spectrum is an urgent necessary,” the CMD wrote.

In the event of closure, MTNL’s 1.5 million 2G users would be affected. However, users will have the choice to upgrade to either MTNL’s 3G services or port out to 2G services of other telcos.

According to reports, MTNL, which curently has 6.2 MHz spectrum in 900 MHz band and 2.2 MHz in 1800 Mhz band, is willing to surrender entire airwaves in 1,800 MHz band and retain 5 MHz in 900 MHz band.

Final call
MTNL has clearly stated in its letter that in the event the DoT does not agree with MTNL’s request it should issue specific and unambiguous instructions to it to close down its services after 5 April. In case the DoT does not give any such instruction the telco will continue to operate its services based on the legal opinion it receives from the ASG. MTNL also asserted that it may seek legal remedies if the government does not accede its request.

 

Disparity
According to reports, MTNL is of the idea that it was on a non-level playing field as its private sector competitors had a CMTS licence which included areas other than 2G and 3G, it was competitively in a disadvantageous position and could not fully commercially exploit its licence.

NT Bureau