Aid to support BSNL’s rural operations, MTNL’s pension payouts.
The department of telecommunications (DoT) plans to support ailing state-run telecom public sector units BSNL and MTNL by giving an annual subsidy of about Rs 3,000 crore to sustain their operations. The two PSUs have been losing revenues as well as market share.
The subsidy amount to BSNL will be given to support its operations in rural and far-flung areas from the Uuniversal Service Obligation Ffund (USOF), while MTNL will be given support for its higher pension and other retirement payouts from the licence and spectrum fee, which both PSUs give to the government, a senior DoT official told Business Standard.
Initial estimates by the department suggests that BSNL incurs a loss of about Rs 2,000-2,500 crore from its landline business, majority of which are social commitments in rural and far-flung areas and MTNL’s pension amount stands at Rs 300-350 crore annually. However, DoT has asked BSNL to quantify the exact amount of loss it incurs due to its social obligations. DoT plans to implement this proposal by this year, the official added.
For the first time since its inception in 2000, BSNL had posted a loss of Rs 1,823 crore in the financial year 2009-10, while MTNL has posted a loss of about Rs 671 for the third quarter ended December 31. MTNL’s net continues to be dragged down by retirement benefits, increase in dearness relief of pension and high wages.
Due to the deteriorating performance of both the telecom PSUs, the department has also revived its proposal for the merger of BSNL and MTNL to synergise their business operations across the country.
“BSNL and MTNL should be merged as they have complimentary operations and can combine their strengths for synergies. The structure of BSNL and MTNL make it difficult for them to be accountable for their performance. DoT should set up a multi-stakeholder committee to develop a restructuring plan for both firms,” the department had said.
Earlier, BSNL got support from Access Deficit Charge (ADC), under which operators paid 0.75 per cent of their total revenues. ADC was used to support BSNL’s unviable landline business in rural areas. However, The Telecom regulatory Authority of India had withdrawn ADC from April 1, 2008. Subsequently, the government decided to give a subsidy of Rs 2,000 crore per annum for the next three years to BSNL from USOF.
With increased competition and falling taxes in the telecom sector, both BSNL and MTNL have been losing subscribers and market share. They also failed to take advantage of the third generation (3G) spectrum, which they were allotted a year ahead of the auction for private players.
Thes loss making organisations are a drain on the wealth of the nation. Social commitments are admirable,but the general attitude of an average employee shows the working culture of these organizations. For example internet service are provided by these organizations, but it is impossible to get any concerned official on line to report any problem of INTERNET. the phone numbers are always engaged or they keep ringing. Services are pathetic.
one thing all PSU emloyees GOVT employees should use PSU products and PSU services then only PSUs'' will lost long against all cutthroat activities of coward politicians
Corrupt Ministers are respnsible for this state of BSNL/MTNL which are social organisations working in rural areas without profit.A admirable move from Government at last.
ITS Officers should be made accountable for the loss as it is learnt that they are enjoying their deemed deputation in the BSNL since 2000 and enjoying all the benefits and allowances. They are not bothered about BSNL as they are all Govt employees and if BSNL sinks and faces loss, they can switch over to any Govt office and continue their service. So many complaints on Bfone, Broadband, GSM etc and no ITS Officers presently heading BSNL are worried. They want their deputation should continue and they are pretty sure that the DOT as well BSNL Corporate Office can do nothing .. because there also the officers are from ITS cadre. What a pity.. Govt of India even after knowing this fate, allowing them to enjoy for the 11th year to continue on deputation basis. BSNL/MTNL will not emerge and face this cutthroat competition unless these ITS officers are absorbed immediately as like other BSNL employees and allowed to shoulder responsibility for its revival.
Inthe vulnarable telecom market,Govt. of India should hold the PSUs BSNL&MTNL in its fold to meet the social commitment as well as to safeguard the country''s security.
BSNL had turn over of 40,000 crores in 2005-06 which came down to 32000 crores in 2009-10 and likely to be 28000 cr in 2010-11. This is because Govt. ie.e the congress goverment didnot allowed BSNL to expand. BSNL''s 93 Million and 45 Million tenders were cancell by Congress and A Raja. BSNL is national property. It is owned by all Indian''s. BSNL''s turnover today could had been 80,000Cr. Congress govt is reponsible for BSNL and looting Indian money.
Content Guide
Due to the deteriorating performance of both the telecom PSUs, the department has also revived its proposal for the merger of BSNL and MTNL to synergise their business operations across the country.
