Lok Sabha Question No. 177 (STARRED), answered on 2016-03-09
Subject: Debt Burden on Telecom PSUs
Ministry: COMMUNICATIONS AND INFORMATION TECHNOLOGY
Asked by: ARVIND GANPAT SAWANT, ANIL SHIROLE

## GOVERNMENT OF INDIA

## MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY DEPARTMENT OF TELECOMMUNICATIONS

## LOK SABHA STARRED QUESTION NO.177 TO BE ANSWERED ON 9 TH  MARCH, 2016

## DEBT BURDEN ON TELECOM PSUs

- *177.  SHRI ARVIND SAWANT:

SHRI ANIL SHIROLE:

Will the Minister of COMMUNICATIONS AND INFORMATION TECHNOLOGY be pleased to state:

- (a) whether the Mahanagar Telephone Nigam Limited (MTNL) and the Bharat Sanchar Nigam Limited (BSNL) are heavily burdened by debt;
- (b) if  so,  the  details  thereof  during  the  last  three  years  and  the  current  year along with the reasons therefor, PSU-wise;

(c) whether both PSUs have asked financial assistance from the Government for their revival; and

(d) if so, the details thereof and the action taken by the Government thereon?

## ANSWER

THE MINISTER OF COMMUNICATIONS AND INFORMATION TECHNOLOGY (SHRI RAVI SHANKAR PRASAD)

(a) to (d) A Statement is laid on the Table of the House.

Contd…2/-

## STATEMENT TO BE LAID ON THE TABLE OF THE LOK SABHA IN RESPECT OF PARTS (a) TO (d) OF LOK  SABHA STARRED QUESTION NO. 177 FOR 9 TH  March, 2016 REGARDING 'DEBT BURDEN ON TELECOM PSUs'.

(a) & (b) Details  of  outstanding  debts  of  Bharat  Sanchar  Nigam  Limited  (BSNL) during the last three years and current year are as follows:

(In Rs. Crore)

|   As on 31.3. 13 |   As on 31.3.14 |   As on 31.3. 15 |   As on 31.01.16) |
|------------------|-----------------|------------------|-------------------|
|          2561.14 |         3738.53 |          6330.42 |           7666.94 |

Details of outstanding debts of Mahanagar Telephone Nigam Limited (MTNL) during the last three years and current year are as follows:

(In Rs. Crore)

| Particular                   |   As on 31.3. 13 |   As on 31.3.14 |   As on 31.3. 15 |   As on 29.02.16 |
|------------------------------|------------------|-----------------|------------------|------------------|
| Total Debt                   |          11542.3 |         14120.4 |         16604.4  |         18062.6  |
| Liability of the Government* |              0   |           765   |          4533.97 |          4533.97 |
| Net Debt on MTNL             |          11542.3 |         13355.4 |         12070.4  |         13529.6  |

*  This  amount  is  refunded  to  MTNL  in  lieu  of  surrender  of  BWA  (Broadband Wireless Access) spectrum and Government has to re-pay the interest and the principal.

BSNL's  debt  is  mainly  due  to  its  requirement  of  funds  for  CAPEX.    This requirement started in June, 2010 after the payment of BWA and 3G spectrum charges to the tune of Rs. 18500 crore to the Government.

The reasons for the debt of MTNL are as follows:

-  MTNL paid  Rs.  11097.97  crore  for  BWA  and  3G  spectrum  charges  to  the Government in June, 2010 after taking loan of Rs. 7533.97 crore.
-  MTNL incurred a loss of Rs. 5322.03 crore in the year 2012-13. Major factors responsible for this position of MTNL are: High staff cost of Rs 4904.47 crore (140% of revenue). This includes Actuarial valuation of retirement benefits to the tune of Rs. 1496 crore.
-  Payment of pension of about Rs 500 crore in 2012-13.
-  Low revenue from 3G services vis-à-vis a huge cost for spectrum (Rs.6564 crore).
-  High interest burden of Rs.1180 crore in 2012-13, Rs.1390 crore in 2013-14 & Rs.1440 crore in 2014-15.

(c) & (d) Government  received  proposals  from  BSNL  and  MTNL  for  financial assistance for their revival. These proposals are as follows:

-  Surrender with refund of Broadband Wireless Access (BWA) spectrum held by BSNL and MTNL.
-  Settlement of pension liabilities of MTNL.
-  Waiver of notional loan with BSNL.

-  Annual financial support  to BSNL and MTNL  to reduce the staff costs.
-  Financial support to MTNL for liability arising from levy of Minimum Alternate Tax (MAT).
-  Proposal for hiving-off mobile tower assets of BSNL into a separate company.

Out of the above mentioned measures, following issues have already been settled by the Government:

-  Surrender with refund of BWA spectrum in both 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, shall get pension from the Government at par with BSNL absorbed staff.
-  Notional loan to the BSNL due to the Government has been waived-off for Rs. 1411 crore.
-  Financial  support  of  Rs.  492.26  crore  has  been  given  to  MTNL  on  account  of liability arising from levy of Minimum Alternate Tax (MAT).
-  Rs. 458.04 crore to MTNL and Rs. 169.16 crore to BSNL are being refunded on account of surrender of CDMA (Code Division Multiple Access) spectrum.

In addition, BSNL and MTNL are taking several steps to enhance revenues through investments  to  strengthen  their  network  and  focus  on  customer  care  and  service delivery to improve revenue generation. Some of these are as follows:

## BSNL

-  BSNL has planned to install 10510 of 3G Base Transceiver Stations (BTSs) & 14232  of  2G  BTSs  under  Phase-VII  GSM  (Global  System  for  Mobile communication) expansion for 15 Million lines.  It has also planned to install additional 9600 of 3G BTSs and replacing of 5300 old BTSs of GSM Phase I, II  & III in North & South Zone. An approximate capacity of 5 million shall be added in the GSM network of North Zone & South Zone. BSNL has already commissioned over 16.42 million lines. Out of the planned BTSs, 9829 (3G) BTSs & 12,491 (2G) BTSs are radiating (Total 22,320). This will improve 2G & 3G network coverage & data capability of 3G network.
-  BSNL has planned to implement ERP (Enterprise Resource Planning) as one of  the  important  IT  initiative  in  two  phases  i.e.  Phase-I  Proof  of  Concept (POC) and Phase-2 Rollout. The ERP has been implemented in all the 49 units including eight Proof of Concept (POC) Circles.
-  During this Five Year Plan (2012-17), BSNL has planned to make the entire wire line customer base network IP enabled. Next Generation Network (NGN) equipment  based  on  the  latest  architecture  are  planned  to  be  deployed gradually to replace the entire Circuit Switched equipments/ Digital Telephone Exchanges.

-  BSNL  has  set  wireline  call  centres  for  the  customers  of  landline  and broadband at Dehradun, Ajmer and Bangalore and traffic from all  circles has been  migrated  to  these  call  centres.  These  call  centres  are  accessible through toll free number 1500 (from BSNL number) and 18003451500 (from other operator numbers).
-  BSNL has launched various customer centric initiatives like Night free calling, Free Roaming, increased minimum speed of broadband to 2 Mbps etc.

## MTNL

-  MTNL  has  planned  to  upgrade  the  existing  High  Speed  Downlink  Packet Access  (HSDPA)  3G  network  supporting  Downlink  speed  of  3.6  Mbps  & Uplink  speed  of  384  Kbps  to  HSPA+  (High  Speed  Packet  Access  +)  with Downlink speed of 21.1 Mbps & Uplink speed of 5.76 Mbps per sector.
-  MTNL is taking steps for up-gradation / augmentation / expansion of existing 2G/3G network.
-  MTNL  is  planning  to  provide  the  backhaul  media  connectivity  of  existing mobile tower sites in Delhi & Mumbai on OFC network in place of Microwave network.
-  MTNL is also exploring synergy with BSNL for its mobile services amongst other initiatives.
-  MTNL has set up wireline call centers for the customers of landline, mobile & broadband at Delhi and Mumbai. These call centers are accessible through Toll  Free  numbers  1500/1503/1504  (from  MTNL  numbers).  These  call centres handle all types of inbound queries, directory enquiries, complaints, requests,  outbound  calling  and  response  through  SMS  (Short  Message service)/e-mail/fax/web portal.

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