Lok Sabha Question No. 1820 (UNSTARRED), answered on 2015-12-09
Subject: Financial condition of Telecom PSUs
Ministry: COMMUNICATIONS AND INFORMATION TECHNOLOGY
Asked by: MALA RAJYA LAXMI SHAH, SAKUNTALA LAGURI, LAXMAN GILUWA, PRATAPRAO GANPATRAO JADHAV, HARI MANJHI, RAM TAHAL CHOUDHARY

## MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY

## GOVERNMENT OF INDIA DEPARTMENT OF TELECOMMUNICATIONS

## LOK SABHA UNSTARRED QUESTION NO.1820 TO BE ANSWERED ON 9 th  DECEMBER, 2015

## FINANCIAL CONDITION OF TELECOM PSUS

## †1820. SHRIMATI MALARAJYA LAXMI SHAH:

SHRIMATI SAKUNTALA LAGURI:

SHRI LAXMAN GILUWA:

SHRI PRATAPRAO JADHAV:

SHRI HARI MANJHI:

SHRI RAMTAHAL CHOUDHARY:

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

- (a) the details of revenue generated and expenditure incurred by BSNL and MTNL under different heads during the last three years;
- (b) whether the Government has conducted any enquiry on declining revenue and increased expenditure of these PSUs and fixed the responsibility therefor;
- (c) if so, the details thereof and the reaction of the Government thereto;
- (d) whether these PSUs have surplus staff particularly at higher levels and still new appointment are being done which put extra financial burden on these PSUs; and
- (e) if so, the details thereof and the action taken by the Government in this regard?

## ANSWER

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

- (a) The details of revenue generated and expenditure incurred by Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) during the last three years are given in Annexure-A and Annexure-B respectively.
- (b) & (c) Government is conscious that the performance of BSNL and MTNL needs improvement. BSNL and MTNL have been unable to invest in expansion/ modernization of their networks due to financial distress.

BSNL and  MTNL  are  preparing  revival  plans  for  increasing  revenue  potential, identifying  business  opportunities,  organizational  restructuring  and  training  to  enable human resource to grow into customer-centric company with expertise in marketing and customer services delivery.

Contd……..2/-

BSNL  and  MTNL  are  taking  several  other  steps  to  enhance  revenues  through investments  to  strengthen  their  network  and  focus  on  customer  care  and  service delivery to improve quality of service. These include:-

-  To provide better network connectivity, BSNL has planned to add 6.3 millon  Global  System  of  Mobile  communication  (GSM)  lines  capacity  in  its network during the year 2015-16.
-  Augmentation  of  mobile  network  by  BSNL  as  part  of  its  Phase-VII Project to create additional capacity of 15 million lines at an estimated cost of Rs. 4804.77 crores. This will result in addition of 14421 2G sites and 10605 3G sites across the country.
-  Based on traffic growth, BSNL is constantly updating the requirements of various Broadband network elements in the system. For improving broadband services, BSNL has installed Google caching servers at 13 locations and done peering with Google at 3 locations for 110 GB capacity. Also Akamai caching servers were installed for 100 GB capacity.  Also, BSNL has upgraded 47  Broadband  Network  Gateways  (BNGs)  in  Broadband  network  for  higher capacity.
-  Augmentation  of  Microwave  (M/W)  backhaul  network  by  MTNL  to support the enhanced speed by providing connectivity of existing mobile tower sites  in  Delhi  &  Mumbai  on  Optical  Fiber  Cable  (OFC)  network  in  place  of Microwave network.
-  BSNL has entered into an agreement for setting up Wi-fi hotspots on revenue share basis to increase its revenue and providing better services to its customers.
-  Introducing  free  night  calling  tariff  plans  for  wireline  customers  to arrest decline in customer base and to acquire new wireline customers.
-  Introduction  of  free  national  roaming  on  pan-India  basis  for  mobile customers for retaining/increasing mobile customer base.

In  order  to  improve  the  financial  condition  and  support  BSNL  in  additional revenue generation, Government has assigned new projects to BSNL such as:

-  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.
-  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.
-  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.
- (d) & (e) BSNL and MTNL have reported that no appointments are being made at higher levels as they have sufficient number of staff at these levels.

Contd…….3/-

Annexure-A Details of Revenue and Expenditure of BSNL during last three years.

(Rs. in lacs)

-  BSNL  income  from  services  has  increased  by  4.16%  in  2014-15  as compared to previous financial year, which is highest in the last five years.
-  BSNL has reversed the trend of operating loss and earned operating profit of Rs. 672 crore in Financial Year 2014-15.

|                                                       | 2014-15   | 2013-14   | 2012-13   |
|-------------------------------------------------------|-----------|-----------|-----------|
| Revenue from sale of services                         |           |           |           |
| - Telephones (Other than Wireless in Local Loop(WLL)) | 4,93,381  | 5,01,326  | 4,94,717  |
| - Cellular                                            | 11,05,273 | 10,66,237 | 10,12,051 |
| - Income from WLL                                     | 17,021    | 18,150    | 22,105    |
| - Income from broad band services                     | 4,99,681  | 4,65,969  | 3,97,478  |
| - Leased lines                                        | 2,07,868  | 2,08,239  | 1,79,674  |
| - Other services                                      | 2,371     | 2,604     | 1,553     |
| - Telegraphs & telex                                  | -         | 399       | 1,088     |
| - Income from passive infrastructure                  | 19,106    | 11,574    | 7,512     |
| - Receipts from other operators                       | 2,73,189  | 3,02,809  | 3,18,157  |
| Other operating revenue                               | 1,06,333  | 38,019    | 1,31,146  |
| Other Income                                          | 1,40,297  | 1,84,309  | 1,47,308  |
| Total Revenue                                         | 28,64,520 | 27,99,635 | 27,12,789 |
| EXPENSES                                              |           |           |           |
| Employee benefits expense                             | 14,96,350 | 15,43,584 | 13,75,782 |
| Finance costs                                         | 50,189    | 21,964    | 35,147    |
| Depreciation and amortisation expense                 | 8,81,680  | 6,02,317  | 8,33,643  |
| Other expenses                                        |           |           |           |
| Administrative, operating and other expenses          | 10,83,959 | 11,00,765 | 10,40,235 |
| License and spectrum fee                              | 2,17,032  | 2,24,330  | 2,05,236  |
| Total expenses                                        | 37,29,210 | 34,92,960 | 34,90,043 |

## Note:

## Annexure-B

Details of Revenue and Expenditure of MTNL during last three years.

(Rs. In lacs)

| PARTICULARS                                  | FY 2012- 13   | FY 2013- 14   | FY 2014- 15   |
|----------------------------------------------|---------------|---------------|---------------|
| REVENUE                                      |               |               |               |
| REVENUE FROM OPERATIONS                      | 3,42,866      | 3,39,173      | 3,40,008      |
| OTHER INCOME                                 | 28,542        | 39,564        | 42,098        |
| TOTAL REVENUE                                | 3,71,408      | 3,78,737      | 3,82,106      |
| EXPENDITURE                                  |               |               |               |
| EMPLOYEES REMUNERATION & BENEFITS            | 4,90,137      | 2,61,540      | 2,65,319      |
| REVENUE SHARING                              | 45,089        | 41,468        | 37,002        |
| LICENCE FEES                                 | 24,108        | 20,953        | 22,154        |
| ADMINISTRATIVE, OPERATING AND OTHER EXPENSES | 76,528        | 1,07,491      | 88,052        |
| DEPRECIATION & AMORTISATION                  | 1,47,694      | 1,16,574      | 1,15,859      |
| FINANCE COST                                 | 1,18,026      | 1,39,015      | 1,43,962      |
| TOTAL EXPENDITURE                            | 9,01,582      | 6,87,041      | 6,72,347      |

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