In 2000, government corporatised the erstwhile Department of
Telecom Services and Department of Telecom Operations (DTO) under name of BSNL
to provide telecom services in all parts of the country except Delhi and Mumbai.
The telecom sector was opened for private players in 1994
with the issuance of licences for providing Mobile Telephone Services.
Initially two private operators were given licence. MTNL was given licence for
mobile services in 1997 as third operator in Delhi and Mumbai. Due to litigation
challenging the decision to give MTNL licence for mobile services, the PSU
could start wireless services in 2001.
BSNL was given licence in 2001. Therefore both the PSUs
entered mobile services market in 2001.
With entry to these PSUs, mobile call rates dropped
significantly from Rs 16 per minute to Rs 2.80.
STATISTICS
BSNL at present serves around 95 million mobile subscribers
and 20 million landline customers. Since MTNL operates only in two circles, it
has around 5 million mobile and 3.5 million landline subscribers.
Being part of Department of Telecom, both the PSU had rich
infrastructure and deep presence.
BSNL has installed 37564 digital exchanges out of which
28532 are located in rural area. It owns around 7 lakh kilometers of Optical
Fibre Cable.
Both the PSU together provide around 80 per cent of wireline
connections and 71 per cent of broadband connections in India . BSNL has
covered all district headquarters, 99 per cent block headquarters, 68 per cent
villages, 91 per cent national highways, 70 per cent state highways, 85 per
cent rail routes, 55 per cent of total geographical area of the country.
For broadband services, it has covered almost all district
headquarters, 97 per cent blocks, 95 per cent cities and 29 per cent villages.
BSNL provides services in rural and remote areas and in
strategically important regions especially North East and Jammu&Kashmir.
BSNL is operating 197 stations through satellite connectivity in far flung area
of Andman and Nicobar islands and Lakhsdweep
islands.
State-run telecom operator BSNL is learnt to have narrowed
loss to Rs 8,198 crore in the
financial year 2012-13 which ended March 31, 2013 from Rs
8,850 crore as per unaudited figure. The loss figure does
not include amount of around Rs
2,700 crore which the company has to get for supporting
rural
landline operations from government.
The company registered loss of Rs 8,850.70 crore during
2011-12 mainly due to regulatory expenses and non-receipt of funds for its
rural landlines operations.
This is the first time BSNL has seen an upward trend in its
income ever since its profit started
declining continuously from Rs 10,183 crore in 2004—05 before recording
a loss in 2009.
MTNL's is expected to post a loss of around Rs 3,300 crore
for financial year 2012-13.
CHALLENGE
Beside commercial side, both the PSUs have social
responsibility as well which incurs them loss. The PSUs are required to procure
equipments through tender process which results them in lagging behind
competitor’s technology.
The PSU are subject to common rules and regulation as
private operators. These PSUs are often asked to meet strategic requirement of
government like providing telecom connectivity in far flung area of Amarnath
during pilgrimage etc.
The challenge before government is to find out way for both
the PSUs in a manner that they can be profitable besides fulfilling strategic
need of the government.
Proposals
Telecom Minister Kapil Sibal in April wrote to Prime
Minister Manmohan Singh to set up a Group of Minister .
Following this, government formed GoM to to look into the
matter of reviving and revitalizing Bharat Sanchar Nigam Limited (BSNL) and
Mahanagar Telephone Nigam Limited (MTNL) who have been running in to losses.
The members of the
GoM include Finance Minister P Chidambaram, Telecom Minister Kapil Sibal,
Commerce and Industry Minister Anand Sharma, Law Minister Ashwani Kumar,
Planning Commission Deputy Chairman Montek Singh Ahluwalia, Information and
Broadcasting Minister Manish Tewari and Minister of State in the Prime
Minister's Office V Narayanasamy.
The GoM has to be notified again following resignation of
Kumar. Changes were under process when this report was being written.
Department of Telecom is learnt to have listed various
proposals for revival of these PSUs including their venturing in to cable and
broadcasting services.
DoT may seek GoM's nod for "Exploring new business
opportunity being created by convergence of services and networks across
telecommunications
(value added services and internet telephony), information,
cable TV and broadcasting media services." By both the PSUs.
Among host of measures, DoT is likely to ask GoM to provide
financial support of BSNL and MTNL for retaining airwaves beyond the initial
quantity that was
allocated to them for mobile and other wireless services.
Government has
decided to charge one-time spectrum fee for airwaves held by operators beyond
initial allocations that was made to start mobile services.
One-time fee for
BSNL's GSM spectrum amounts to around Rs 6,912 crore and MTNL Rs 3,205 crore.
BSNL and MTNL's proposal to surrender wireless broadband
spectrum is likely to be discussed at the GoM meet. BSNL and MTNL were asked to
pay amount of Rs 8,313.8 crore and Rs 4,533.97 crore on June 20, 2010 for the
airwaves that are being currently used to provide 4G services.
The proposal include GoM's nod for implementing voluntary
retirement scheme in both the PSU's for 1 lakh BSNL employees and 20,000
employees in MTNL.
The salary and pension expenses of overall MTNL employees
form 103 per cent of company's revenue and for BSNL it is 49 per cent.
DoT will also seek GoM's nod to discharge pension
liabilities by paying lumpsum amoount of around Rs 5,925 crore.
The Department will
ask GoM to consider providing preferential treatment to both the state-run
telecom firms in telecom services used by government departments and other
public sector units.
END.
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