Lok Sabha Question No. 1550 (UNSTARRED), answered on 2019-11-27
Subject: Impact of Free Telecom Services on BSNL
Ministry: COMMUNICATIONS
Asked by: Kunwar Danish Ali

## GOVERNMENT OF INDIA MINISTRY OF COMMUNICATIONS DEPARTMENT OF TELECOMMUNICATIONS

## LOK  SABHA UNSTARRED QUESTION NO. 1550 TO BE ANSWERED ON 27 TH   NOVEMBER, 2019

## IMPACT OF FREE TELECOM SERVICES ON BSNL

## 1550. SHRI KUNWAR DANISH ALI:

Will the Minister of COMMUNICATIONS be pleased to state:

(a) whether the mode of 'No Cost Pricing' followed by a private Telecom Service Provider (TSP) is  causing  loss  to  the  Government  exchequer  and  if  so,  the  details  thereof  and  the  reaction  of  the Government thereto;

(b) whether  free  services  offered  by  the  said  TSP  is  making  the  BSNL  less  competitive  in  the telecom market and if so, the details thereof and the reaction of the Government thereto; and

(c) whether the Government has reportedly favoured the aforesaid TSP by reducing Interconnect Usage Charge (IUC) that was denied to other companies and if so, the details thereof and the reasons therefor?

## ANSWER

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

(a) Due  to  fierce  competition  in  the  telecom  sector  over  the  recent  years,  Telecom  Service Providers  (TSPs)  have  revised  their  tariff  downwards.    As  a  result,  the  Gross  Revenue  (GR)  and Adjusted Gross Revenue (AGR) of all TSPs has declined since last three financial years. Detail of GR andAGR for the last three years is as under:

(in Rs. lakh crore)

|   S.No. | Financial Year   |   Amount ofGR |   Adjusted GR |
|---------|------------------|---------------|---------------|
|       1 | 2016-17          |          2.65 |          1.85 |
|       2 | 2017-18          |          2.46 |          1.5  |
|       3 | 2018-19          |          2.24 |          1.39 |

Accordingly,  License  Fee  (LF)  which  is  8%  of  AGR  and  Spectrum  Usage  Charges  (SUC) which is 3 to 5 percent of AGR, has also decreased.

(b) Bharat  Sanchar  Nigam  Limited  (BSNL)  has  informed  that  to  remain  competitive  in  the market, BSNL also reduced tariff and the same has been reflected in the financial statements.  Despite increase  in  the  subscriber  base,  revenue  earned  from  mobile  services  has  declined  in  the  last  three years.    Details  of  mobile  subscribers  of  BSNL  and  revenue  from  mobile  services  of  BSNL  is  as under:

| Year    |   Number of subscribers as on 31 st March of FY (in crore) |   Revenue from mobile service (in Rs. crore) |
|---------|------------------------------------------------------------|----------------------------------------------|
| 2016-17 |                                                      10.14 |                                     11272    |
| 2017-18 |                                                      11.19 |                                      7185.41 |
| 2018-19 |                                                      11.57 |                                      4708.63 |

The Cabinet approved the revival plan for BSNL on 23.10.2019 which inter-alia, includes the measures to reduce the Staff cost through a Voluntary Retirement Scheme (VRS) to the employees of age 50 years and above, administrative allotment of Spectrum to BSNL for providing 4G services, monetisation of assets of BSNL, and debt restructuring by raising of sovereign guarantee bonds.

(c) TRAI  has  informed  that  revision  of  Interconnect  Usage  Charge  (IUC)  rates  is  a  periodic exercise.    Last  time,  Domestic  Termination  Charge  (for  wireless  to  wireless  calls)  vide  'The Telecommunication  Interconnection  Usage  Charges  (Thirteenth  Amendment)  Regulations,  2017' dated 19.09.2017 and International Termination Charge vide 'The Telecommunication Interconnection Usage Charges (Fourteenth Amendment) Regulations, 2018' dated 12.01.2018 were downward revised.  The reasons for revision of IUC rates are described in Explanatory Memorandum (EM)  attached  to  the  afore-mentioned  Regulations.    These  rates  are  uniformly  applicable  to  all Telecom Service Providers.

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