Category Archives: Telecom

Issues connected with telecom matters

Cabinet Committee on Economic Affairs decides on 30% Quota to ITI

15 Wednesday Jan 2014

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The Cabinet Committee of Economic Affairs (CCEA) has approved the proposal of the DOT to continue allotment of 30% quota on telecom equipments for BSNL, MTNL to the ITI. The Press Statement issued by the Govt. in this connection is given below:

Procurement quota to M/s. Indian Telephone Industries Ltd. on procurements made by BSNL and MTNL

The Cabinet Committee on Economic Affairs has approved the following proposal of the Department of Telecommunications regarding continuation of reservation quota for M/s Indian Telephone Industries Limited (M/s. ITI Ltd.).

This will enable ITI to survive in the competitive environment of telecom manufacturing.

a) To continue the reservation quota policy for M/s ITI Ltd. by reserving 30 percent of procurement orders placed by BSNL and MTNL for M/s ITI Ltd., for products manufactured by ITI Ltd. and 20 percent of the network roll out orders for their turn key projects (like GSM network roll-out) of BSNL and MTNL.

b) ITI would accept orders under the reservation quota only after the price is known and it is commercially viable.

c) BSNL/MTNL will give 10 percent advance against the orders placed on ITI, subject to liquidation of advances outstanding against previous projects awarded to M/s ITI Ltd. by BSNL/MTNL., so that ITI does not face the problem of working capital for execution of orders, subject to adequate safeguards for proper utilization of these advances.

d) ITI shall exercise its option under the reservation quota within 15 days of the opening of bid.

e) The aforesaid policy measures shall remain in force for a period of one year with effect from 21.09.2013 and shall again be reviewed considering the financial health of ITl after the expiry of this period. However, the Government has introduced the Public Procurement Bill 2012 in Parliament, and under the provisions thereof, procuring entities, including CPSEs, would have to frame Rules for Public Procurement of Goods, Work and Services. Once such public procurement rules for CPSEs are framed after the enactment of the Public Procurement Act, these would also be applicable to CPSEs under the administrative control of the Department of Telecommunications.

BSNL and MTNL will be requested to extend the benefit of reservation quota to ITI Limited for a period of one year with effect from 21.09.2013.

The extension of the benefit of (i) 30 percent of procurement orders placed by BSNL / MTNL for M/s ITl Ltd. for products manufactured by it and (ii) 20 percent of the network roll out orders for turn key projects (like GSM network roll-out, etc.) of BSNL/ MTNL with 10 percent advance against the orders placed on M/s ITI Ltd., subject to liquidation of advances outstanding against previous projects awarded to M/s ITI Ltd. by BSNL/MTNL will ensure enough orders for ITl for production activities.

MTNL to order GSM lines worth Rs. 600 crores

14 Tuesday Jan 2014

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The CMD MTNL, Shri Garg has stated that MTNL would order GSM lines worth Rs.600 crores to update and improving its network, mainly 2G.
This most necessary considering the present efficiency of the MTNL services.

PSUs being harassed by the Government

12 Sunday Jan 2014

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Unable to meet the Disinvestment target of Rs.40,000 crore this financial year, the government has started harassing the PSUs to somehow get the money from them. Disinvestment in coal could not take place due to the strong opposition from the workers. Now the disinvestment in IOC also could not take place.
In this situation, the government is asking all the cash rich PSUs to provide funds to the government either through disinvestment, ross-holding or special dividend.
This has been what happened to BSNL also. The government took away all the cash through Spectrum charges, notional loan, interest and so on. Now BSNL is not having funds to expand and even to pay the wages of the employees. The government wants all the PSUs to reach that position so that privatisation will be easy and the corporates and big business can maximise their profits.

GoM decides Refund of Spectrum Charges to BSNL, MTNL

10 Friday Jan 2014

Posted by in BSNL - Better Service to the Nation, PSU, Telecom

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The Group of Ministers(GoM) on Revival of BSNL which met yesterday, 9th January 2014, presided by Finance Minister P.Chidambaram, decided to refund the Spectrum Charges to BSNL and MTNL. BSNL will get a refund of Rs. 6,724.51 crore and MTNL Rs. 4,533.97 crore.
The charges are being refunded for the surrender of spectrum by BSNL for Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Kolkata and both Delhi and Mumbai for MTNL.
This has been one of the long pending demand of both the PSUs since the spectrum allotted to them was not technically and financially viable in the above areas.
“The refund will be made to ensure support for the revival and revitalisation of BSNL and MTNL in the competitive telecom sector. It shall also help these PSUs to arrange finances to meet basic financial commitments such as operation and maintenance of their telecom network,” the GoM stated.
The Joint Forum of BSNL/MTNL Unions/Associations has been continuously pressurising the DOT and the Government to refund these charges, which will help the PSUs to reduce their loss and utilise the funds for development. It had also submitted detailed memorandum to the GoM on this subject.
This is not charity, but only refund of the money for the surrender of the airwaves, which the government can again auction for mopping up funds.
The GoM has to take decisions still on the demand of the Joint Forum to mandate all the Central and state Governments and their PSUs that they should use BSNL/MTNL services. The proposal is already with the Government. Another major demand is to waive the Licence Fee for these government companies.
Our pressure should continue in these matters.

GoM on “Revival of BSNL, MTNL Meets today, 9th January 2014

09 Thursday Jan 2014

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The Group of Ministers (GoM) on Revival of BSNL/MTNL headed by the Finance Minister is meeting today, 9th January 2013. This is the fourth meeting of the committee. A report published in the “India Public Sector” dated 8th January is given below for information.

“Can the GoM on MTNL, BSNL chalk out a revival strategy for the loss making telecos?

STATE-owned telecom companies BSNL and MTNL are facing tough time. But a crucial meeting of the group of ministers (GoM) assigned the task of finding the course of profitability for MTNL and BSNL on Wednesday is likely to bring some cheers to the once-profitable jewels of the government. Will MTNL be able to cut its workforce? Will there be a proposal to develop its huge land resource in Mumbai and Delhi? Finally, will there be an effective revival strategy for both BSNL and MTNL? These and many other issues will be discussed in the fourth meeting of the GoM headed by finance minister P Chidambaram. BSNL has been incurring losses since 2009-10. BSNL’s profits started dipping after 2004-05, when it had made net gains of Rs 10,183 crore. Its losses stood at Rs 8,198 crore for 2012-13 against Rs 8,851 crore in 2011-12. The company had reported a loss of Rs 1,093.72 crore in the same period a year ago. Likewise, in 2012-13, MTNL recorded a net loss of Rs 5,321.12 crore on annual revenue of Rs 3,428.6 crore. The last time MTNL made a profit was in 2008-09, when it posted a net of Rs 205.9 crore on revenue of Rs 4,496.2 crore. After reporting widening of losses for nine quarters in a row, MTNL reported narrowing of its standalone net loss to Rs 947 crore for the July-September 2013.
The department of telecom (DoT) has put a number of issues for GoM for improving condition of MTNL and BSNL. These include a synergy between the two companies, waiver of one-time spectrum charges which amounting to about Rs 10,000 crore, waive off around Rs 980 crore principal amount of notional loan amount outstanding against BSNL among others.
The last meeting was held on September 12, 2013 when it decided on pension issue. The pension proposal of MTNL was approved by Cabinet recently that would cost the government an estimated Rs 500 crore annually. The decision is likely to bring additional amount of about Rs 1,500 crore (including interest) in the books of MTNL as refund from government for the pension that the PSU paid to its around 43,000 employees.
On January 9, Cabinet will discuss about refund of Rs 12,800 crore to MTNL and BSNL which the telecos had to pay for wireless broadband spectrum in 2010 auctions. This will be the biggest boost to the companies’ balance sheet. BSNL had to pay Rs 8,313.8 crore and MTNL Rs 4,534 crore for these airwaves which put a heavy burden on their books.
Both BSNL and MTNL have offered to surrender their BWA spectrum and sought refunds. The two companies did not have to buy spectrum in the auction but were asked to match the price that a successful bidder had to pay for the airwaves.
MTNL proposes to develop its large land banks in Mumbai and Delhi, where it operates. According to a recent presentation, MTNL has some 230,000 sq m of technical land and 380,000 sq m of residential land in Mumbai and Delhi. Commercial use of these lands will give the PSU a handsome profit. MTNL estimates it can earn as much as Rs 3,600 crore in the next three years by selling the built-up area developed from the land and Rs 400 crore from leasing some of it. MTNL has already earned some rent from some of its built-up space in the two cities—Rs 4 crore in Delhi and Rs 30 crore in Mumbai. It estimates total revenue from renting space at around Rs 66 crore for the full year.
Both BSNL and MTNL have a number of state-mandated social obligations to fulfil. Government interference in the functioning of the PSUs is another reason for its dwindling profits. Moreover, MTNL’s 42,000-employee workforce is three times its required strength. To cut staff, MTNL estimates it will have to spend about Rs 5,000 crore on a voluntary retirement scheme (VRS), making it the biggest such plan that the telco has offered. The current staff cost is around Rs 4,000 crore, including retirement benefits.
On the other hand, Bharti Airtel, India’s largest telecom services provider, has fewer than 18,000 employees across the country and outsources several functions.”

The Private Companies and their advocates against CAG Audit.

08 Wednesday Jan 2014

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As naturally expected, the corporates and their legal sharks have started serious attacks on the decision of the High Court to allow CAG to audit the private telecom firms to find out whether they have cheated the government by reducing the revenue to avoid the revenue sharing to the government. Clear indications are there that this is a fact.
Editorials are written against the decision. Congress leader and Senior Advocate Abhishek Manu Singhvi has strongly opposed the HC decision.
This may turn in to another big scam. Let us wait to see the future developments.

Govt. proposes free mobile for BPL families

08 Wednesday Jan 2014

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The government’s proposal to provide a free mobile connection to all BPL families is understood to have been approved by the Telecom Commission. This is part of the UPA government’s pre-poll freebies to the Below Poverty Line (BPL) families, which will benefit about 60 lakh families. Along with the free mobile, a free talk-time of 200 minutes also will be allowed.Well and good.
The expenditure for this is expected to be Rs. 7,000 crore and will be taken from the USOF, which has got sufficient funds at its disposal.

UPA government and the ruling Congress Party is gearing up for the election. After the utter defeat in the recent assembly elections, the Congress is in a desperate move to woo the people. The news that the Congress has allotted Rs. 500 crores for advt. blitz to focus Rahul, itself speaks volumes of this desperation.

CAG can audit the accounts of Private Telcos _ Delhi High Court

06 Monday Jan 2014

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The Delhi High Court has given judgment that the Comptroller and Auditor General of India has full powers to examine the accounts of the private telecom companies. The ruling was given in the appeal given by the private telecom companies against the decision of the CAG to examine the accounts in connection with the telecom 2G Scam, in which many private companies are involved and hugely benefitted.

The Delhi High Court has earlier allowed the CAG to audit the accounts of the power companies in Delhi, after the Kejriwal government has requested CAG to audit the same.

It is well known that the private companies are in the habit of manipulating the accounts to reduce the taxes to be paid to the government as also the revenue share, where such stipulations are there.
I welcome the decision of the High Court. Of course, private companies may appeal to the Supreme Court, but at least for the present the welcome decision is there.

Zero Tolerance for Pesky Calls – TRAI takes action

02 Thursday Jan 2014

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It was intolerable. Continuous pesky calls from many companies, business concerns etc. as part of their advertisement strategy. I used to get at least four-five every day, which was a nuisance. Now it has been reduced to a random one or two in a week.
Today newspaper reports indicates that actually the pesky calls have come down because of the stern action taken by the TRAI. According to statement of the TRAI Advisor A.Robert Jerard Ravi, as reported in the press, more than Rs. 2.15 crore penalty was imposed on the guilty telemarketers in the last four months alone and the pesky calls have come down to about 11,000 from the earlier 50,000 a month. It is reported that about 9 lakh telecom resources were also disconnected.
So far so good. But this menace of pesky calls have to be put down. Zero Tolerance in this matter is required.

TRAI recommendation on Spectrum charges will cause loss of Rs.3,738 crore to Govt.

27 Friday Dec 2013

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NEW DELHI: The Department of Telecom has estimated that lowering annual spectrum fee as recommended by Trai will cause the national exchequer a minimum loss of Rs 3,738 crore on renewal of the three licences that are due to expire in 2014.

Airtel’s licences in Delhi and Kolkata, Vodafone’s in Delhi, Mumbai and Kolkata and Loop Mobile’s in Mumbai are to expire in 2014.The TRAI has recommended 3% flat rate for the licences which is below the present rate. (Courtesy: ET)