Indian state-owned operator BSNL has threatened to dramatically scale back plans for an unprofitable rural Wimax rollout unless the government coughs up more compensation.
The company has written to the Department of Information requesting an extra 23.95 billion rupees ($541.8m) in grant money – which BSNL says is the minimum amount required not to run the project at a loss, the Financial Expressreported.
The unexpectedly high cost BSNL had been forced to pay for BWA spectrum – around 83 billion rupees - has driven the cost of the rollout sky-high, the company said in the note.
Under the project as first envisioned, BSNL was to roll out 7,863 Wimax base stations in rural areas. But if a grant is not awarded, the deployment will be limited to 1,798 base stations as it is all the current budget of 7.1 billion rupees will allow.
State-owned operators BSNL and MTNL were hit with large bills for spectrum during the recent auctions for 3G and BWA spectrum, under the stipulation that they would receive spectrum in advance in exchange for matching the winning bids.