Lok Sabha Question No. 546 (UNSTARRED), answered on 2019-11-20
Subject: Loss Incurred by BSNL and MTNL
Ministry: COMMUNICATIONS
Asked by: Sanjay Haribhau Jadhav, Uday Pratap Singh

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK  SABHA UNSTARRED QUESTION NO. 546 TO BE ANSWERED ON 20 TH   NOVEMBER, 2019

## LOSS INCURRED BY BSNL AND MTNL

## †546.   SHRI SANJAY JADHAV: SHRI UDAY PRATAP SINGH:

Will the Minister of COMMUNICATIONS be pleased to state:

- (a) whether  Bharat  Sanchar  Nigam  Limited  and  Mahanagar  Telephone  Nigam  Limited  have incurred  loss  repeatedly  during  the  last  few  years  and  if  so,  the  details  thereof  including  the  loss registered by these two companies during each of the last three years and the current year, Companywise and the reasons therefor;
- (b) whether the Government has allocated any fund to pull these companies out of loss and if so, the details thereof;
- (c) the  reasons  for  the  reported  deterioration  in  the  services  provided  by  these  two  Telecom Service Providers (TSPs);
- (d) whether the Government has formulated any scheme to improve the services and revival of the aforesaid TSPs and if so, the details thereof and the action taken by the Government thereon; and
- (e) the number of employees who have not been paid salary during the last few months, TSP-wise and the reasons therefor along with the steps taken by the Government in this regard?

## ANSWER

## MINISTER OF COMMUNICATIONS, LAW & JUSTICE AND ELECTRONICS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD)

- (a) Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) are incurring losses for last few years. Details of losses incurred by BSNL and MTNL during the last three years and current year is as under:

(in Rs. Cr)

| Name of PSU   | Losses incurred during   | Losses incurred during   | Losses incurred during   | Losses incurred during        |
|---------------|--------------------------|--------------------------|--------------------------|-------------------------------|
|               | 2016-17                  | 2017-18                  | 2018-19                  | 2019-20 (upto September 2019) |
| BSNL          | 4793                     | 7993                     | 14904                    | 7506                          |
| MTNL          | 2971                     | 2971                     | 3398                     | 2003                          |

Stiff competition in mobile segment, high employee cost and absence of 4G services (except in few places for BSNL) in the data-centric telecom market are the major reasons for the losses in BSNL and MTNL.

(b) The  Cabinet  in  its  meeting  held  on  23.10.2019  approved  the  revival  plan  for  BSNL  and MTNL.  The revival plan inter-alia includes the measures to reduce the Staff cost through a Voluntary Retirement Scheme (VRS), Administrative allotment of Spectrum to BSNL/MTNL for providing 4G services, Monetisation of Land/Building and Tower/Fibre Assets of BSNL/MTNL, Debt restructuring by raising of Sovereign Guarantee Bonds and in-principle Merger of BSNL & MTNL.

The Government has approved Rs.29,937 Cr (Rs.17,169 Cr on account of Ex-Gratia on VRS and  Rs.12,768  Cr  due  to  preponement  of  pensionary  benefits  spread  over  a  period  of  ten  years) through budgetary allocation for VRS. Full cost of spectrum (excluding GST) of Rs.14,115 Cr for BSNL and of Rs. 6,295 Cr for MTNL will be funded by Government through equity infusion and subscription to non-cumulative preference shares respectively. GST component of Rs 3,674 Cr on the cost of spectrum will also be funded through Budgetary allocation from Government. Government has also approved sovereign guarantee bonds of Rs 15,000 Cr to be raised and serviced by BSNL and MTNL.

(c) Telecom Regulatory Authority of India (TRAI) monitors the performance of telecom service providers including BSNL and MTNL against the benchmark for various Quality of Service (QoS) parameters  laid  down  by  TRAI  by  way  of  QoS  regulations  issued  from  time  to  time,  through Quarterly Performance Monitoring Reports (PMRs).

As per PMR issued by TRAI for the quarter ending March 2019, BSNL is meeting all the benchmarks for Basic (Wireline) and Broadband Services.  For Cellular Mobile Telephone Service, BSNL is meeting the benchmark for all the parameters in all of its Licensed Service Areas (LSAs) except for the parameter 'Network QoS DCR Spatial distribution measure or DCR Network\_QSD(90,90) (benchmark 2%)' and 'Network QoS DCR temporal distribution measure or DCR Network\_QTD(97,90) (benchmark < 3%)' in West Bengal service area only.

MTNL is meeting all QoS parameters of Basic (Wireline), Cellular Mobile and Broadband Services in both of its LSAs i.e. Delhi and Mumbai except for the parameter '% of faults repaired within 5 days' (benchmark 100%) in wireline service in Delhi LSA only.

(d) The  Cabinet  in  its  meeting  held  on  23.10.2019  approved  the  revival  plan  for  BSNL  and MTNL as stated in para (b) above.

(e) BSNL has informed that salary to all of its employees is paid up to the month of September, 2019. MTNL has informed that salary to all employees is paid up to the month of August, 2019.  The delay in salary payment is due to financial constraints faced by these two companies.

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