BSNL's Demand for Additional Funding Rejected by FinMin

The Indian Finance Ministry in December 20101 rejected BSNL's demand for additional funding of Rs 5354.55 crore to build an alternate communcations network for the armed forces. The ministry directed the telecoms ministry to ensure the project is completed within the previously approved budget of Rs 9175.16 crore.  It is believed that the finance ministry was not convinced with BSNL's logic for a hefty project cost jump. The finance ministry suggested that the additional cost of building an alternate network for the Air Force can be funded from the latter's plan budget.

BSNL’s project that involves building of an alternate communcations network is crucial since the armed forces will migrate all their communication requirements to this alternate optic fibre network and thereby be able to free more radio spectrum for commercial telephony. The armed forces have vacated 3G airwaves in August 2010 after being assured that the telecoms ministry will roll out this alternate communications network as scheduled. The freeing of 3G waves by the Army had enabled the telecoms department to allot 3G bandwidth to winners of the auction on 1 September 2010.