Lok Sabha Question No. 211 (UNSTARRED), answered on 2016-11-16
Subject: Market Share and Services of Telecom PSU
Ministry: COMMUNICATIONS
Asked by: HARISH CHANDRA MEENA, LAXMI NARAYAN YADAV, ARVIND GANPAT SAWANT, NARANBHAI KACHHADIA, BHARTRUHARI MAHTAB, RAHUL RAMESH SHEWALE, LAXMAN GILUWA, SANJAY SHAMRAO DHOTRE, PRATAPRAO GANPATRAO JADHAV, ANIRUDHAN SAMPATH, M. B. RAJESH, INNOCENT, RAM TAHAL CHOUDHARY, HARISH DWIVEDI

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS

## DEPARTMENT OF TELECOMMUNICATIONS

## LOK SABHA

## UNSTARRED QUESTION NO.211 TO BE ANSWERED ON 16 TH  NOVEMBER, 2016

## MARKET SHARE AND SERVICES OF TELECOM PSU

## 211. SHRI HARISH MEENA:

SHRI LAXMI NARAYAN YADAV:

SHRI ARVIND SAWANT:

SHRI NARANBHAI KACHHADIYA:

SHRI BHARTRUHARI MAHTAB:

SHRI RAHUL SHEWALE:

SHRI LAXMAN GILUWA:

SHRI SANJAY DHOTRE:

SHRI PRATAPRAO JADHAV:

DR. A. SAMPATH:

SHRI M.B. RAJESH:

SHRI INNOCENT:

SHRI RAM TAHAL CHOUDHARY:

SHRI HARISH CHANDRA ALIAS HARISH DWIVEDI:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether the market share and profitability of both the telecom PSUs the MTNL and BSNL has been declining in comparison to their private counter parts;
- (b) if  so,  the  details  of  profit/losses  of  the  PSUs  and  these  mobile  and  landline subscribers of these PSUs in comparison to the private operators during the last three years  and  the  current  year  along  with  the  reasons  for  declining  market  share  and losses;
- (c) whether the telecom services particularly mobile network quality of these PSUs on their services are not satisfactory and the mobile tower capacity is not commensurate with the total number of subscribers;
- (d) if so, number of mobile towers set up by MTNL and BSNL in their service areas as  on  date,  State-wise  and  the  number  of  towers  proposed  to  be  set  up  in  poor connectivity areas, State-wise including Jharkhand; and
- (e) the steps taken by the Government to increase the market share and revenue along with improving the service quality and network capacity of these PSUs ?

## ANSWER

## THE MINISTER OF STATE (IC) OF THE MINISTRY OF COMMUNICATIONS & MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI MANOJ SINHA)

(a)&(b) The details of market share in term of subscribers of Bharat Sanchar Nigam Limited (BSNL), Mahanagar Telephone Nigam Limited (MTNL) and private Telecom Services Providers (TSPs) during the last three years and upto September, 2016 are as follows:

| Name Company   | Market Share (landline and mobile) (in %) as on   | Market Share (landline and mobile) (in %) as on   | Market Share (landline and mobile) (in %) as on   | Market Share (landline and mobile) (in %) as on   |
|----------------|---------------------------------------------------|---------------------------------------------------|---------------------------------------------------|---------------------------------------------------|
| Name Company   | 31.3.2014                                         | 31.3.2015                                         | 31.03.2016                                        | 30.09.2016                                        |
| BSNL*          | 12.13                                             | 9.36                                              | 9.59                                              | 10.21                                             |
| MTNL*          | 0.74                                              | 0.71                                              | 0.67                                              | 0.67                                              |
| Total PSU      | 12.87                                             | 10.07                                             | 10.26                                             | 10.88                                             |
| Total Private  | 87.13                                             | 89.93                                             | 89.74                                             | 89.12                                             |

The profitability figures of telecom PSUs (i.e., BSNL & MTNL) and private TSPs for the last three years are as under:

(Profit Before Tax - in Rs. Crores)

| Name of Company   | 2013-14   |   2014-15 |   2015-16 |
|-------------------|-----------|-----------|-----------|
| BSNL              | -7124     |     -8843 |     -4169 |
| MTNL              | 8322 *    |     -2893 |     -2498 |
| Private Companies | -3946     |     13485 |      4616 |

* Due to payment of pension amount of Rs.12,017 crores to MTNL by government after Cabinet decision.

The declining trend of market share of Public Sector Undertakings (PSUs) has been arrested in 2015-16 and their market share for the whole year is likely to be higher. Thus, they have been competitive while retaining market share.

The main reasons for the reduction in market share of PSUs over the years are due to combination of number of factors:

## Wireline (landline):

-  There is a general decline in the fixed lines telephone connections as there is a tendency  to  shift  to  mobile  services  because  of  their  convenience,  utility  and availability even while on move.
-  Surrender of telephone connections due to fixed monthly rental charges.
-  Frequent interruption in landline service due to cable damage by various agencies working for road widening works, water and drainage activities, laying of electrical cables, etc. Further, the repair work of damaged cables is delayed due to obtaining permission from local authorities which affects timely restoration.
-  Delay in decision making due to laid down procedures for PSUs.

## Wireless (mobile):

-  Stiff competition in mobile sector.
-  Flexible / Aggressive tariff plans of private Telecom Service Providers.
-  Entry  of  International  Telecom  Service  Providers  with  deep  pockets  that  follow aggressive sales and marketing of services unlike the PSUs.

(c) TRAI  monitors  the  performance  of  service  providers,  including  BSNL  and  MTNL against the benchmarks for various Quality of Service (QoS) parameters laid down by TRAI in the Quality of Service Regulations issued from time to time Quarterly Performance Monitoring Reports (PMRs) submitted by service providers.

As per TRAI Report:

- (i) PMR for the quarter ending June 2016, for 2G services, M/s MTNL is meeting all  the  parameters  in  both  Delhi  &  Mumbai  service  areas.    In  respect  of  M/s BSNL, the service provider is meeting all the parameters except Worst affected BTSs due to downtime (%age) (Benchmark <2%) in Kolkata and North East Service area, Stand-alone-Dedicated-Control-Channels (SDCCH)/Paging Chl. Congestion (%age) (Benchmark <1%) in West Bengal Service area and Worst affected cells having more than 3% Traffic Channel (TCH) drop (benchmark < 0.1%)   in West Bengal Service area only.
- (ii) PMR for the quarter ending June 2016, for 3G services, M/s MTNL is meeting all  the  parameters  in  both  Delhi  &  Mumbai  service  areas  except  Connection with  good  voice  quality and  Circuit  Switch  Voice  Quality  (CSV  quality) (Benchmark >95%) in Delhi Service area only.  In respect of M/s BSNL, the service provider is meeting all the parameters except Worst affected Nod B's due to downtime (%age) (Benchmark <2%) in Kolkata and North East Service area and Worst affected cells having more than 3% CSV Quality (Benchmark >95%) in West Bengal Service area only.

- (iii) In respect of Basic Wireline Service, as per PMR for the quarter ending June 2016, MTNL is meeting all the benchmarks for all the parameters in both Delhi &  Mumbai  service  areas  except  %  Fault  repaired  within  5  days  (for  urban areas) in Delhi & Mumbai service areas and Termination / closure of service %age requests for Termination / closure of service complied within 7 days in Mumbai service area.  In respect of M/s BSNL, the service provider is meeting all the parameters.

In  BSNL  network,  overall  mobile  tower  capacity  is  commensurate  with  the  total number of subscribers.  Till 30.09.2016 the total subscriber across the country is 9.31 crores against total capacity of the GSM 9.51 crores.  In case of Jharkhand capacity installed is 20.7 lakhs while connection working in Jharkhand are 10.3 lakhs.

In  MTNL  network,  it  is  forced  to  go  slow  on  developmental  projects  due  to  severe financial  problems.    However,  to  improve  mobile  network  capacity  and  quality,  MTNL  has placed the order of Mobile expansion and up-gradation for an amount of Rs.348 crores during the current and the last financial year.

(d) The details of mobile BTS/Node-Bs installed as on 30.09.2016 and the tower planned to be installed in upcoming projects (Phase VII+) under completion are given at Annexure-I and Annexure-II respectively.

(e) Government has taken several steps to increase the market share and revenue along with improving the service quality and network capacity of BSNL & MTNL as details below:

I- Provided financial assistance in the following forms:

-  Refund of surrendered BWA (Broadband Wireless Access) spectrum in two service areas held by MTNL and in 6 service areas held by BSNL.  Under this head, Rs. 4533.97 crore has been refunded to MTNL through bonds and Rs. 6724.51 crore is being refunded to BSNL through budgetary resources.
-  The pension liability of MTNL for its staff who got absorbed from DoT, has been taken over by the Government.
-  Notional  loan  of  Rs.  1411  crore  to  BSNL  which  was  due  to  be  paid  to  the Government was waived-off.
-  Financial  support  of  Rs.  492.26  crore  has  been  given  to  MTNL  on  account  of liability arising from levy of Minimum Alternate Tax (MAT).
-  Refund of Rs. 458.04 crore to MTNL and Rs. 169.16 crore to BSNL on account of surrender of CDMA (Code Division Multiple Access) spectrum.

II - Assigned some projects to BSNL, namely:

-  Comprehensive  Telecom  Development  Plan  for  the  North-Eastern  Region  for provision of mobile services in uncovered villages in Arunachal Pradesh and two districts of Assam at estimated project cost of Rs. 1975.38 crore and implementation  of  Transmission-Media  Plan  for  North  Eastern  Region  at  an estimated cost of Rs.295.97 crore on 10.9.2014.
-  Implementation of providing mobile connectivity in 2199 identified locations in Left Wing Extremism (LWE) affected areas at an estimated cost of Rs. 3567.58 crores on 4.6.2013.
-  Implementation  of  Comprehensive  Telecom  Development  plan  for  Andaman  & Nicobar  Islands  and  Lakshadweep  Islands  through  augmentation  of  satellite connectivity/bandwidth at an estimated cost of Rs. 120.49 crores on 7.11.2014.

Contd…4/-

Annexure I

| No. of Working Status of GSM BTS & Node B circle wise as on 30/9/2016   | No. of Working Status of GSM BTS & Node B circle wise as on 30/9/2016   | No. of Working Status of GSM BTS & Node B circle wise as on 30/9/2016   | No. of Working Status of GSM BTS & Node B circle wise as on 30/9/2016   |
|-------------------------------------------------------------------------|-------------------------------------------------------------------------|-------------------------------------------------------------------------|-------------------------------------------------------------------------|
| S.No                                                                    | Name of Circle                                                          | No. of working BTS as on 30-09-2016                                     | No. of working Node B as on 30.09.2016                                  |
|                                                                         |                                                                         | (2G)                                                                    | (3G)                                                                    |
| 1                                                                       | Andaman & Nicobar                                                       | 152                                                                     | 43                                                                      |
| 2                                                                       | ASSAM                                                                   | 1433                                                                    | 869                                                                     |
| 3                                                                       | BIHAR                                                                   | 2950                                                                    | 905                                                                     |
| 4                                                                       | KOLKATTA                                                                | 1276                                                                    | 706                                                                     |
| 5                                                                       | JHARKHAND                                                               | 1991                                                                    | 853                                                                     |
| 6                                                                       | NORTH EAST I                                                            | 784                                                                     | 349                                                                     |
| 7                                                                       | NORTH EAST II                                                           | 752                                                                     | 366                                                                     |
| 8                                                                       | ORISSA                                                                  | 3225                                                                    | 1438                                                                    |
| 9                                                                       | WEST BENGAL                                                             | 2543                                                                    | 638                                                                     |
| 10                                                                      | ANDHRA PRADESH                                                          | 7655                                                                    | 3645                                                                    |
| 11                                                                      | CHENNAI                                                                 | 1872                                                                    | 967                                                                     |
| 12                                                                      | KERALA                                                                  | 5408                                                                    | 2906                                                                    |
| 13                                                                      | KARNATAKA                                                               | 5710                                                                    | 2601                                                                    |
| 14                                                                      | TAMIL NADU                                                              | 5834                                                                    | 2360                                                                    |
| 15                                                                      | CHHATTISGARH                                                            | 1918                                                                    | 518                                                                     |
| 16                                                                      | GUJARAT                                                                 | 4643                                                                    | 2367                                                                    |
| 17                                                                      | MAHARASHTRA                                                             | 7398                                                                    | 2630                                                                    |
| 18                                                                      | MADHYA PRADESH                                                          | 3865                                                                    | 1247                                                                    |
| 19                                                                      | HARYANA                                                                 | 2172                                                                    | 1203                                                                    |
| 20                                                                      | HIMACHAL PRADESH                                                        | 1252                                                                    | 397                                                                     |
| 21                                                                      | Jammu & Kashmir                                                         | 1189                                                                    | 473                                                                     |
| 22                                                                      | PUNJAB                                                                  | 3489                                                                    | 1603                                                                    |
| 23                                                                      | RAJASTHAN                                                               | 4245                                                                    | 1565                                                                    |
| 24                                                                      | UTTARAKHAND                                                             | 1058                                                                    | 491                                                                     |
| 25                                                                      | UTTAR PRADESH (EAST)                                                    | 5996                                                                    | 1908                                                                    |
| 26                                                                      | UTTAR PRADESH (WEST)                                                    | 2837                                                                    | 1361                                                                    |
|                                                                         | TOTAL                                                                   | 81647                                                                   | 34409                                                                   |

Contd…5/-

## Planned BTSs Status under Phase VII+ (as on 30.09.2016)

| S.N   | Name of Circle      |   3G(NODE Bs) planned in Ph VII+ |   2G BTS Planned in Ph-VII+ |
|-------|---------------------|----------------------------------|-----------------------------|
| 1     | HARYANA             |                              530 |                         383 |
| 2     | HIMACHAL PRADESH    |                              276 |                         153 |
| 3     | JAMMU & KASHMIR     |                              176 |                         176 |
| 4     | PUNJAB              |                              370 |                         337 |
| 5     | RAJASTHAN           |                              428 |                         428 |
| 6     | UTTARANCHAL         |                              256 |                         154 |
| 7     | UTTAR PRADESH(East) |                              710 |                         625 |
| 8     | UTTAR PRADESH(West) |                              305 |                         330 |
| 9     | ANADAMAN NICOBAR    |                               60 |                          67 |
| 10    | ASSAM               |                              330 |                         270 |
| 11    | BIHAR               |                              821 |                         821 |
| 12    | KOLKATA             |                             1000 |                        1000 |
| 13    | JHARKHAND           |                              185 |                         185 |
| 14    | NORTH EAST-I        |                              227 |                         268 |
| 15    | NORTH EAST-II       |                               59 |                          59 |
| 16    | ORISSA              |                              618 |                         570 |
| 17    | WEST BENGAL         |                               75 |                         200 |
| 18    | ANDHRA PRADESH      |                             1460 |                         660 |
| 19    | CHENNAI TD          |                              371 |                         251 |
| 20    | KERALA              |                             1950 |                         638 |
| 21    | KARNATAKA           |                             1600 |                         830 |
| 22    | TAMILNADU           |                             1461 |                         600 |
| 23    | CHATTISGARH         |                                0 |                           0 |
| 24    | GUJARAT             |                                0 |                           0 |
| 25    | MAHARASTRA          |                                0 |                           0 |
| 26    | MADHYA PRADESH      |                                0 |                           0 |
|       | Total               |                            13268 |                        9038 |

********************

## Annexure - II