NEW DELHI: A pan India roaming pact with Vodafone Idea Limited (VIL) for the fourth generation or 4G commercial services may be a first step towards a synergy between the Bharat Sanchar Nigam Limited (BSNL) and Aditya Birla Group-driven private operator, the state-run telco groups said.
"There is a need to have a synergy between the two telecom service providers. Since BSNL have no 4G, it may be a better option to have a pan-India roaming agreement with Vodafone Idea so that our subscribers can latch onto its high-speed data network," Aftab Ahmed Khan, president, Sanchar Nigam Executives' Association (SNEA) told ETTelecom.
The Delhi-based group represents more than 13,000 company's executives.
State-owned BSNL which is also operating mobile networks of Mahanagar Telephone Nigam Limited (MTNL) in Delhi and Mumbai metropolitans, is yet to receive 4G airwaves while the equipment procurement process has also been dragged following a slew of controversies.
In a letter to the Cabinet Secretary Rajiv Gauba in June this year, industrialist Kumar Mangalam Birla offered to hand over the ABG’s 27.66% stake in Vodafone Idea (VIL) to a public sector entity who could save the company from a collapse.
Meanwhile, in a recent finding, Frankfurt-based Deutsche Bank said that the "government must back" state control of VIL by quickly merging it with BSNL and recapitalising it.
The All India Graduate Engineers & Telecom Officers Association (AIGETOA) also believes that in the absence of 4G, any roaming deal with private sector rival could be a way out to grab a greater chunk of market share.
"Collaboration between the two companies (BSNL and VIL) can be created at least to capture a sizable market share," Ravi Shil Verma, president, AIGETOA said, adding that the state-driven company has no 4G infrastructure and VIL's strength can be utilised.
Verma further said that BSNL can provide backbone to VIL, and the cooperation between the two would be imperative to keep both companies afloat, while a full-fledged merger would be a policy decision that might take its own time and course.
"The only viable solution is for the government to recapitalise Vi by converting its debt into equity, preferably while merging it with BSNL, and then providing it a clear commercial mandate based on profitability targets and incentives,” Deutsche Bank said.
However, Khan cautioned against debt liabilities of individual telcos, and feels that a further support or a relief package from the government could be required to make such a merger operational.
BSNL has a liability of about Rs 22,000 crores while the Centre has recently offered a sovereign guarantee of Rs 8,500 crore to ease debt burden.
Vodafone Idea owes nearly Rs 1.5 lakh-crore to the government that included deferred spectrum payment, and adjusted gross revenue (AGR) dues.
Last month, the Supreme Court dismissed the plea of Vodafone Idea and other telcos seeking rectification of ‘arithmetical errors’ in the AGR computation.
The UK-based Vodafone Group Plc holds 44.39% in VIL, which is a merger between Idea Cellular and Vodafone India.
Meanwhile in March this year, a BSNL group had sought Prime Minister Office (PMO) intervention to expedite the commercial launch of 4G services through the existing network upgradation and accelerate the assets monetisation drive to revive the ailing telco.
In October 2019, Prime Minister Narendra Modi government approved a Rs 69,000 crore revival package for BSNL and MTNL that included a voluntary retirement scheme (VRS) and monetisation of assets.
Nearly 50% or 78,569 employees of the total BSNL workforce of 1,53,000 opted for VRS, and that has turned into massive savings in salary outgo which earlier constituted about 75% of its overall income.
No comments:
Post a Comment