State-owned, loss-making telecom major, Bharat Sanchar Nigam Ltd (BSNL) plans to surrender its broadband wireless access (BWA) spectrum in 17 circles, after realising that it has been saddled with outdated technology.

BSNL paid about Rs8,500 crore in 2010 for acquiring the licence for BWA in 22 circles, but was offered 2.4 gigahertz, a low-quality band, which does not even go well with its WiMax services. BSNL is the only Indian telecom operator that opted for WiMax, which was rolled out about 10 years ago globally, but has been overtaken by long term evolution (LTE), or 4G, technology.

The state-owned behemoth is paying a high price for having acquired licences for an outdated system. In fiscal 2010-11, its losses mounted to Rs6,000 crore (as against a loss of Rs1,823 crore in 2009-10).

Its profits have been declining sharply since they peaked at Rs10,000 crore in 2005-06.

While BSNL has sought a refund from the government by offering to surrender the BWA licences for 17 circles, analysts expect the government to turn down the proposal.

The state-owned telecom operator, which provides landline and mobile services across the country – except in the Mumbai and Delhi circles – is heavily over-staffed.

It has a workforce of 280,000 employees and is keen on retiring nearly 100,000 by offering them a voluntary retirement scheme. Employee wages eat up almost half its revenues.

Private telecom operators opted for the more efficient 2.3 gigahertz band for BWA spectrum when they bid for the licences last year. Most of these companies are now preparing to roll out 4G broadband services from next year.

Sam Pitroda, an adviser to the prime minister on telecom and related issues, had suggested that BSNL should slash its workforce by a third. The government is also studying the possibility of merging its telecom units – including BSNL, MTNL (which provides services in Delhi and Mumbai) and ITI Ltd – into one entity.

The landline subscription base in India is declining sharply in India, as most of the new subscribers prefer mobile telephony.

Both BSNL and MTNL have a stranglehold over landline phones, with an over 82-per cent share of the market.

BSNL, however is still keen on boosting its landline business and wants to invest nearly Rs1,000 crore in reviving it.