"BSNL has entered into an agreement with franchisees for roll-out of Worldwide Interoperability for Microwave Access (WiMax) services in urban areas of Himachal Pradesh, Chennai, Tamil Nadu, Orissa, Uttar Pradesh (West), Rajasthan, Karnataka, Bihar, Andhra Pradesh, Gujarat and Maharashtra service areas under revenue share basis," Minister of State for IT & Telecom Gurudas Kamat said in a reply to the Rajya Sabha.
State-run BSNL paid Rs 8,313.80 crore for pan-India Broadband Wireless Access (BWA) spectrum. To use this spectrum, BSNL had opted for franchisee model to establish its network on a revenue-sharing basis.
As per the agreement, the franchisee was to deploy the WiMax network and BSNL would provide infrastructure like premises, towers and media connectivity.
The Department of Telecommunications has also constituted a committee under the chairmanship of the Member (Finance), Telecom Commission, for a detailed examination of the tender floated by BSNL for short-listing WiMAX franchisees.
According to reports, BSNL chose shell companies as franchisees and alloted them wireless access (WiMAX) spectrum for offering broadband services on a revenue-sharing regime.
BSNL has been making huge operating losses in the past two years and only managed to stay in the black because of interest income from its accumulated cash reserves.
As per its audited books of account, BSNL earned profits from its inception in October, 2000, up to the 2008-09 financial year. However, it incurred a loss of Rs 1,822.65 crore for the first time in the 2009-10 fiscal.
The loss incurred by the BSNL during the 2009-10 financial year is mainly on account of a reduction in revenue and an increase in expenditure.
Recently, the government constituted a new committee under Sam Pitroda to scout for a new Chairman and Managing Director (CMD) for state-owned telecom firms BSNL and MTNL.