In many news papers of yesterday, statements of both the CDMA as well as GSM private companies were published demanding the government not to grant any bail-out support to BSNL and MTNL, the telecom PSUs, stating that ‘it would be in contravention of all tenets of policy, fair competition and level playing field’. This is the pressure tactics of the private lobby and corporates to stop the proposed assistance of Rs. 20,000 crore being recommended by the DOT towards refund of the spectrum surrendered by BSNL and MTNL and towards adjusting the one time charges for the excess spectrum etc.
The Joint Forum has immediately reacted and issued the following Press Release exposing the hypocrisy of the private companies and the real position and also demanding the government to give immediate financial assistance to BSNL and MTNL.


D-7, Telegraph Place, Gole Market, New Delhi – 110 001.

Press Release 31st January, 2013

BSNL and MTNL should be given Assistance
– Private Telcos’ opposition unjustified

The private telecom companies’ organisations, both of CDMA and GSM operators have opposed any financial assistance by the government to the telecom PSUs, BSNL and MTNL, which have posted loss for the last three years, stating that ‘ such proposal was not permissible as it would be in contravention of all tenets of policy, fair competition and level playing field.’

It is interesting that the private players have now come with the argument of level-playing field. In fact, these private companies have been continuously getting all benefits and undue favours from the government most of which are denied to the telecom PSUs. While, the mobile licences were issued in the 1990s, only the private companies were given the licences and DOT (BSNL was not formed) and MTNL were denied the same for about 6 years, in a move to help the private companies. In the auctions for spectrum, while the private players could bid for their choice circle, BSNL and MTNL were denied the right to bid, but were compelled to pay the charges for the highest bid in all circle, resulting in almost double the amount that the private telcos paid. In the allotment of high quality spectrum, again the private players were favoured. While the private telcos could purchase equipment without any restrictions, the purchase by BSNL was restricted by government and also by continued legal cases by the private manufacturers. BSNL was restrained from purchasing equipment from Chinese companies, which are comparatively of low cost, in the name of security risk, while private companies purchased from the same companies without any objection. These are only a few examples, how the private companies have managed to continuously get maximum favours through continued pressure on the government. Being a government company, BSNL and MTNL could not put such pressures and have been side-lined causing much loss and disadvantage.

Further, as government companies, implementation of the social commitment of the universal service of the government is incumbent on BSNL and MTNL and they are fulfilling the same providing connections and service in the lakhs of villages and remote areas, which are loss-making, causing huge losses to the PSUs. The assistance being given from the USO Fund is nominal and completely insufficient. The private telecom companies are also liable to provide connections in the remote and rural areas, but they have managed to evade the responsibility.

BSNL was assured by the government at the time its formation that it will be assisted through payment of Access Deficit Charges (which will come to about Rs.3,000 to Rs. 4,000 crore), Reimbursement of Licence Fee paid by it to the government and also liberal assistance from the USO Fund. These are all arbitrarily withdrawn by the government within a few years. Instead only Rs.1,500 crore for the current year and Rs.1,250 crore for next year is proposed to be provided to BSNL as assistance.

Out of the Rs. 40,000 crore surplus cash with the company at the time of the formation, almost all of it has been taken by the government in the name of spectrum charges, repayment of notional loan of Rs.7,500 crore (no loan was given to BSNL and there was no necessity at that time) with unusually high interest etc. In addition, these PSUs have a large and senior work force inherited from the government (DOT) and their salaries come to around 40% of the expenditure.

All the above factors have resulted in these PSUs posting loss for the last three years. While many of the private companies have been charged for violation of the licence conditions and rules in providing connections, no such violations have been charged against the PSUs. While the private companies are profit-motivated, the PSUs have the social commitment of the government to implement.

In such a situation, it is of utmost necessity to ensure the financial viability of BSNL and MTNL to ensure universal service in the country, checking the telecom price level etc. It may be remembered that till BSNL and MTNL entered the mobile services, the private companies have been charging exorbitantly and it was only after their entry that the mobile charges came down. If the PSUs are not there, the telecom companies will once again raise the charges very high.

The Forum of BSNL/MTNL Unions/Associations therefore, demands the Central government to provide maximum assistance to BSNL and MTNL to tide over the present financial crisis and expand and improve their services.

Convener, Joint Forum
Mob: 9868231431