Lok Sabha Question No. 884 (UNSTARRED), answered on 2018-02-07
Subject: Poor Performance by Public Sector TSPs
Ministry: COMMUNICATIONS
Asked by: NEELAM SONKER

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK  SABHA UNSTARRED QUESTION NO. 884 TO BE ANSWERED ON 7 TH  FEBRUARY, 2018

## Poor Performance by Public Sector TSPs

- †884.  SHRIMATI NEELAM SONKER:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether after the entry of a private telecom company in market, BSNL and MTNL are lagging behind in the competition and are on the verge of closure;
- (b) if  so, the details thereof and the reasons therefor along with the steps taken by the Government in this regard;
- (c) whether  indifference  shown  by  the  Government  has  adversely  affected  BSNL and MTNL networks and their functioning and absence of new and recent technology therein has led to diminished new recruitments and heavy reduction in the number of employees;
- (d) if  so,  whether  any  corrective  policy  has  been  prepared  by  the  Government  to make them viable in competitive market; and
- (e) if so, the details thereof ?

## ANSWER

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

- (a) to (e) The wireless market share and number of subscribers of Bharat Sanchar Nigam Limited (BSNL) has increased while the market share of Mahanagar Telephone Nigam Limited (MTNL) has marginally decreased during the last three years as can be seen from table below:

| Status as on   | BSNL                                | BSNL                | MTNL                                | MTNL                |
|----------------|-------------------------------------|---------------------|-------------------------------------|---------------------|
|                | Number of Subscribers (In millions) | Market Share (In %) | Number of Subscribers (In millions) | Market Share (in %) |
| 31.03.14       | 94.65                               | 10.46               | 3.37                                | 4.59                |
| 31.03.15       | 76.83                               | 7.92                | 3.51                                | 4.57                |
| 31.03.16       | 86.82                               | 8.40                | 3.56                                | 4.50                |
| 31.03.17       | 101.40                              | 8.66                | 3.63                                | 4.03                |
| 31.10.17       | 106.80                              | 9.06                | 3.59                                | 3.88                |

To remain competitive both BSNL and MTNL have also reduced their tariff plans due  to  private  Telecom  Service  Providers  (TSP)  offering  data  and  voice  tariff plans at substantially lower rates. This has impacted the revenue and subscriber base of all TSPs including BSNL and MTNL.

From time to time the Government has supported BSNL and MTNL. The details of which are as below:

## BSNL:

-  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.
-  Refund of Rs. 169.16 crore to BSNL on account of surrender of CDMA (Code Division Multiple Access) spectrum.
-  Optical  Fibre  Cable  based  Network  for  Defence  Services  (NFS  Project)  has been given to BSNL on nomination basis at the cost of Rs.13,334 crore.
-  For execution of BharatNet project, Government has provided Rs.5744 crore in Phase-I and has earmarked Rs.6500 crore in Phase-II to BSNL.
-  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 an 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.
-  Submarine Optical Fiber Cable Project at the cost of Rs.1900 crore has been given to BSNL on nomination basis for providing connectivity to the Andaman and Nicobar Islands.
-  Work of setting up of 25000 Wi-Fi Hotspots at Rural Telephone Exchanges at the cost of Rs.940 crore has been given to BSNL on nomination basis.
-  Work of setting up of Satellite Gateway at the cost of Rs.54 crore has been given to BSNL on nomination basis.

## MTNL:

-  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 has been refunded to BSNL through budgetary resources.
-  The  pension  liability  of  MTNL  staff  who  were  absorbed  from  Department  of Telecommunications (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 on account of surrender of CDMA (Code Division Multiple Access) spectrum.
-  Provision  of  High  Speed  Internet  on  FTTH  and  Wi-Fi  at  the  Hon'ble  M.Ps residences. The Project cost of about Rs 43.2 Crore was funded by DoT.

Though, BSNL and MTNL have more number of employees than the industry norms. However, to maintain state of the art equipment, BSNL and MTNL have recruited around 45000 and 650 employees respectively, since their inception.

BSNL and MTNL Board have full powers to take decisions regarding upgradation and adoption of new technology.

BSNL and MTNL have been incurring losses for a number of years. Therefore, as  per  Department  of  Public  Enterprises  (DPE)  guidelines,  both  BSNL  and MTNL have been declared as 'Incipient Sick'.

Consequent upon declaration of BSNL as an 'Incipient Sick', action has been initiated  by  the  Department  of  Telecommunications  (DoT)  for  preparation  of revival/restructuring  plan  of  BSNL  as  per  DPE  guidelines.  Three  (03)  Indian Institute of Management (IIM) have been requested to submit their willingness for undertaking a study and preparation of revival/restructuring plan of BSNL.

The 'Revival Plan of MTNL' prepared by MTNL  consultant is under consideration  in  DoT.  The  summary  of  recommendations  and  discussions include  focus  on  customer,  defend  current  revenue  and  additional  revenue including Network CAPEX investment, Asset Monetization - Lease, Sale of real estate,  buildings,  Lease/sale  of  Tower,  Fiber,  Copper  and  active  equipment, Reduction  in  retirement  age  from  60  to  58  years  for  employees,  Voluntary Retirement  Scheme  (VRS),  Debt  restructuring  and  Synergy  in  operations  of MTNL  and  BSNL  etc.  An  Internal Committee  of DoT  is examining  the recommendations of the report prepared by the consultant to decide the path of financial, human resources and corporate restructuring for revival of MTNL.

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