BSNL, MTNL to get Rs 11,258 crore on spectrum surrender

 The Cabinet on Thursday approved a Rs 11,258-crore bonanza to two beleaguered state-run telecommunication companies and approved regulations for television rating agencies.

Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) can surrender their broadband wireless access (BWA) spectrum and get refunds of Rs 11,258 crore, the Cabinet said. TV rating agencies, on the other hand, might have to shell out Rs 200-300 crore to meet at least one of the regulations, which also require them to be registered.

BSNL and MTNL had asked for a refund of the entire amount paid for the BWA spectrum it had not used. The Department of Telecommunications had proposed a refund, stating that the payment had seriously depleted the cash reserves of both.

BSNL had paid Rs 6,724.51 crore and MTNL Rs 4,533.91 crore. Both had together accumulated a loss of Rs 39,314 crore (BSNL Rs 24,681 crore; MTNL Rs 14,633 crore) at the end of March 2013.

Information and Broadcasting (I&B) Minister Manish Tewari said at a press briefing after the Cabinet meeting: “The money will refunded over a period of time as part of the revival package, as both the companies are passing through difficult times.” The refund would be help improve the balance sheets of the telcos.

BSNL and MTNL had decided to surrender the BWA spectrum, used for fourth generation (4G) or long-term evolution (LTE) services, at a time when the industry was gearing up for data-driven 4G or LTE services.

On regulating television rating agencies, the Cabinet said  these bodies would have to register themselves with the information and broadcasting ministry within 30 days.

The new norms say rating agencies should ramp up the minimum panel size to 20,000 panel homes within six months of the guidelines coming into force and raise it by 10,000 a year until it reaches 50,000 panel homes. Industry officials pegged the additional cost in increasing panel homes at Rs 200-300 crore for rating agencies.

Television rating points (TRP) are often used as a parameter by advertisers before selecting a channel or programme to air ads. The ratings have often been criticised for their small sample size and lack of transparency.

“We believe that once the guidelines are in place, more companies will enter the field,” Tewari told Business Standard.

According to the guidelines, no single company or legal entity can directly or through associates have 10 per cent or more of paid-up equity in both rating agencies and broadcasters or advertising agencies. “Non-compliance of guidelines on cross-holding, methodology, secrecy, privacy, audit, public disclosure and reporting requirements shall lead to forfeiture of two bank guarantees worth Rs 1 crore furnished by the company in the first instance, and, in the second instance shall lead to cancellation of registration. For violation of other provisions of the guidelines, the action shall be forfeiture of bank guarantee of Rs 25 lakh for the first instance of non-compliance, forfeiture of bank guarantee of Rs 75 lakh for the second instance of non compliance and for the third instance, cancellation of registration,” a government release said.

Tewari said: “The entire issue of TRPs has been under consideration for long. There has been also a Trai recommendation and recommendations from a expert committee headed by former secretary-general of Ficci and present Finance Minister of West Bengal, Amit Mishra, which had called for setting up a Broadcast Audience Research Council. However, since the setting up of the council was taking time, the I&B ministry asked Trai to again look at the issue, which had suggested some guidelines for TV rating agencies, based on which the Cabinet took a decision today.”

TAM Media Research, the largest TV rating agency in the country, refused comment.