Proposals to Revive BSNL, MTNL Being Prepared: Ravi Shankar Prasad

Proposals to Revive BSNL, MTNL Being Prepared: Ravi Shankar Prasad
Telecom Minister Shri Ravi Shankar Prasadd said in Lok Sabha that Government is planning to revive Public Sector Unit (PSU) telecom companies BSNL & MTNL which are facing financial stress due to stiff competition and high employee costs, reduction in tariffs & absense of 4G services.
Shri Ravi Shankar Prasad informed the Lok Sabha that there is no proposal to close state-run BSNL and Mahanagar Telephone Nigam Limited (MTNL).

Department of Telecom (DoT) has taken several policy initiatives to facilitate infrastructure growth for delivery of quality services to recover financial loss, which has aggravated due to the tariff war triggered by the entry of Reliance Jio. The employee cost of BSNL is 75.06 per cent and that of MTNL is 87.15 per cent of their total income, while the same for private telecom companies varies between 2.9 to 5 per cent. The government is planning to take care of these employees and revive these PSUs for fair competition in market.

“Indian Institute of Management, Ahmedabad and M/s Deloitte were engaged to facilitate the preparation of the revival/ restructuring plan of BSNL and MTNL respectively. Pursuant to their recommendations and approval of respective Boards, a comprehensive revival plan for BSNL and MTNL is under preparation,” Prasad ji clarified.

The telecom department is taking steps, such as providing contracts to install services in Left Wing Extremist and low connectivity areas and hotspots in rural areas.

According to data shared in the Lok Sabha, the market share of MTNL in the two circles where it operates has declined to 6.95 per cent at the end of 2018-19 from 7.37 per cent in 2016-17. BSNL’s market share, despite cut-throat competition, increased to 10.72 per cent from 9.63 per cent on pan-India basis during the same period. “The telecom sector is facing financial stress due to stiff competition and reduction in tariffs.

The gross revenue of two private operators ie Airtel and Vodafone/Idea has also reduced in FY 2017-18 and FY 2018-19,” Prasad ji added. He also said the government is utilising BSNL for providing mobile connectivity in Naxal-affected areas, improving telecom network in Andaman and Nicobar and Lakshadweep islands, optical fibre based network for defence services and execution of BharatNet project, among others.

As per official data, a total of 1.63 lakhs employees, including 46,597 executive and 1,17,305 non-executive, were working in BSNL as on March 31, 2019 and MTNL’s had 21,679 (3,128 executive and 18,551 non-executive employees).

The minister said there was a delay of some days in payment of salary in the last five to six months at MTNL due to shortage of funds arising out of mismatch in revenue inflows and liability outflows, but now no salary payment is pending. “The salary to BSNL employees is being paid regularly. However there was some delay in the salary paid for the month of February, 2019,” Prasad ji said.

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