This was a question asked on Quora
First of all the question is not correctly said, BSNL was given spectrum but then the game begins to show the whole case as BSNL’s destiny was made to fail. Every government be it congress or bjp all are responsible for the current situation of BSNL.
Govt of India conducted first spectrum auction for 4G services in 2010, where private companies acquired spectrum on 2300MHz including Infotel Broadband (who later turned to be Jio). But BSNL was offered BWA (broadband wireless access) spectrum atleast in 2007–08 (though trials started back in 2004), but that was on 2600MHz band. BSNL launched WiMAX services using this frequency band in 2009 from Ajmer, later BSNL WiMAX became quite popular in Kerala circle.
However as Airtel launched first 4G LTE network in Kolkata in 2012, BSNL started making issues that they are scraping WiMAX network for LTE and for that this 2600MHz band of bandwidth would not be much helpful. Since 2011 BSNL wanted to return this spectrum and get refund for this. However by 2014 BSNL got that refund. Interestingly BSNL returned spectrum in 6 circles (Cat A circles 5, metro circle 1) and MTNL in 2 circles (metro circle 2). As BSNL and MTNL left these lucrative circles, the time would made the Jio to rule Indian telecom as monopoly hits.
Since 2016 BSNL is shutting down WiMAX in remaining circles for the favor to LTE. Now the delay to give newer spectrum for LTE starts, and BSNL got spectrum for LTE (on 2100MHz and 2500MHz) only in January 2019.
On my personal note, BSNL was the de-facto broadband provider til 2010, only private player Sify and Meghbela was available at my location. And BSNL with 2Mbps ADSL connection was superfast, ahead of the competition. But post 2010, many smaller players as well as bigger players with fiber rolled out services, and BSNL just watched this thing happening. Apart from government policy, BSNL officials also took a major role in the deterioration of BSNL. BSNL is also good in southern circles, even in the north eastern states, but somehow BSNL has a poor show always, in Kolkata.
Let’s compare BSNL v Jio on LTE turf. Jio came in market in 2016 and BSNL is upcoming in Q3 of 2019. This delay is made by different people - but all seem to be wellwisher for Jio only. BSNL’s network upgradation plans were halted so many times, that BSNL could not leverage benefit from data friendly CDMA technology.
It’d be a shame for Indians if BSNL is privatized or shut down. What I expect that BSNL may be partially halted its services in few circles like in Kolkata, where it is worst, full of bogus people.