The Indian government looks set to allow struggling state-owned operator BSNL to surrender, and be refunded for, the majority of the Wimax spectrum it was made to acquire in an auction last year.
The Department of Telecom has given in-principle agreement to BSNL's proposal to return its Broadband Wireless Access (BWA) spectrum in 13-14 circles, LiveMintreported.
The final terms are still being discussed, and the deal would still require final approval.
BSNL acquired spectrum on the 2.4GHz band in 20 of India's telecom circles last year, in advance of the Broadband Wireless Access (BWA) spectrum auction. The operator was made to match the winning bid for the spectrum, and ended up paying 83.14 billion rupees ($1.61 billion) for the licenses.
But the operator was unhappy with being saddled with non-standard frequencies, and with Wimax spectrum in a market looking increasingly likely to be dominated by TD-LTE, and in October asked to return the spectrum in 17 circles.
According to LiveMint, BSNL could be in for a refund of over 80 billion rupees, as the operator has also asked for some of the interest on its payments to also be returned.
The operator is expected to report a more than 60 billion rupee loss for the 2010-11 financial year, up from 18 billion rupees a year earlier, largely as a result of the debt accumulated from the BWA auction as well as the even larger 3G auction.