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On Revival of BSNL / MTNL – Reply by Communications minister in Parliament

20 Wednesday Dec 2017

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THE REPLY GIVEN IN PARLIAMENT ON BSNL/MTNL REVIVAL BYTHE MINISTER OF STATE (IC) OF THE MINISTRY OF COMMUNICATIONS & MINISTER OF STATE IN THE MINISTRY OF RAILWAYS (SHRI MANOJ SINHA)
We are reproducing below, the reply given by the Communications Minister in the Parliament on 02-08-2017. The reply clearly indicae the mindset of the government. Instead of formulating a revival plan and assisting BSNL, the Minister is finding justifications for the present situation.

REPLY BY MINISTER:

(a)Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) were earning profits since their inception until 2008-09. However, their financial condition has been affected due to various reasons. Major reasons are as follows:
•One time upfront cost of spectrum for 3G and BWA (Bandwidth Wireless Access) required to be
paid in 2010 for the amount of Rs.11097.97 crores by MTNL and Rs 18500.38 crores by BSNL
which has eroded their reserves. MTNL had to take the loan to meet this expenditure. This has
created financial stress on both PSUs.
•Both PSUs are also burdened with salary payments of the legacy DOT (Department of
Telecommunications) employees, who are now working as absorbed employees in these PSUs.
•The market dynamics have changed in last 5 to 6 years in telecom sector because of the entry of more number of operators, which have covered major market share and put lot of pressure on the revenues of these PSUs.
•Both the PSUs could not invest timely in upgradation of their infrastructure.

•BSNL is providing telecom services in non-profitable areas like remote and hilly regions in various states e.g. Himachal Pradesh, Uttarakhand, Jammu & Kashmir, North East, Chhattisgarh,
Andaman & Nicobar Islands and Lakshdweep Islands.
•Both the PSUs have to follow the prescribed guidelines and procedures which sometimes leads
to inherent delays.
•MTNL is providing its services only in Delhi and Mumbai Service Areas unlike other major
Telecom Service Providers (TSPs).
Government has taken various steps to make BSNL and MTNL viable in the background of stiff
competition in the telecom sector by:
•Refund of surrendered BWA (Broadband Wireless Access) spectrum in two service areas held by MTNL and in 6 service areas held by BSNL. Under this head, Rs. 4533.97 crore has been
refunded to MTNL through bonds and Rs. 6724.51 crore has been refunded to BSNL through
budgetary resources.
•The pension liability of MTNL for its staff who got absorbed from DoT, has been taken over by the Government.
•Notional loan of Rs. 1411 crore to BSNL which was due to be paid to the Government was
waived-off.
•Financial support of Rs. 492.26 crore has been given to MTNL on account of liability arising from levy of Minimum Alternate Tax (MAT).
•Refund of Rs. 458.04 crore to MTNL and Rs. 169.16 crore to BSNL on account of surrender of
CDMA (Code Division Multiple Access) spectrum.

Government has also assigned some projects to BSNL, namely:
•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 on 10.9.2014.
•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 on 4.6.2013.
•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 on 7.11.2014.
(b) & (c)At present, there is no proposal for merger of BSNL and MTNL. However, based on the
financial results of MTNL for the financial year 2016-17, MTNL has been classified as “Incipient
Sick CPSE” as per Department of Public Enterprise (DPE) Guidelines. As per the DPE guidelines,
Department of Telecommunications has to formulate revival/restructuring/closure road map for MTNL, the process of which has been initiated.

A White Paper on the state PSU and urgent action for revival required.

16 Thursday Jun 2016

Posted by in Disinvestment, PSU

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During the UDF government in Kerala, the state PSUs were purposely made ineffective and weakened for closure and privatisation. The new LDF government and the Chief Minister has declared that the state PSUs will be revived and strengthened.

It is necessary for this purpose to prepare a White Paper on the present situation of all the state PSUs continued with action plan to rejuvenate them. Opinions/Suggestions from the trade unions, experts, public and the workers of these PSUs may be taken, before finalisaion of the programme.

The people of the country have to understand the difference between pro-PSU policy of the LDF government and the anti-PSU policy of the NDA government.

Forum will meet on 25th June on Revival of BSNL

24 Tuesday Jun 2014

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

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The Forum of BSNL Unions/Associations will be meeting tomorrow, 25th June, at the Local Council Room, NTR, Eastern Court, New Delhi at 04.00 PM to discuss about the Revival of BSNL. The Forum has already given a detailed letter to the Communications Minister Ravi Shankar Prasad on the Revival of BSNL and has requested for a meeting to present our views. So far the meeting has not taken place.
Communications Minister had already stated that action will be taken to revive BSNL and MTNL and had a meeting with the Management of both these PSUs. The details of the discussions are not available, but it is felt that some move is there in this connection.
The Forum wants a detailed discussion with the Minister at the earliest. The Forum meeting tomorrow will review all these developments.

Communications Minister for Revival of BSNL, MTNL

18 Wednesday Jun 2014

Posted by in BSNL - Better Service to the Nation, BSNL News

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Communications and IT Minister Shri Ravi Shankar Prasad has stated that he would personally oversee the revival of BSNL and MTNL. He also stated: “I will undertake a provocative role in monitoring performance of these companies. I will have network operating system installed in my office which will monitor the performances of the towers in all the circles. The circles with low performances will be questioned.”

The statement of the Minister is much welcome. There has been no systematic check up for the improvement of the BSNL, MTNL services so far.

But this alone is not sufficient. There are many urgent actions to be taken on which the Forum of BSNL Unions/Associations has already given a memorandum to the Minister and sought for an appointment. The Minister has not found time to meet the Forum, although he was quick to meet the private companies to get their opinions. The Communications Minister should meet the representatives of the workers, who also have got very important suggestions for the revival of BSNL and MTNL and also for improvement of services to the people. Hope the Minister will act on his promise.

Forum writes to Cabinet Ministers

31 Friday Jan 2014

Posted by in BSNL - Better Service to the Nation, BSNL News

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Forum of BSNL Unions/Associations have written again to Central Cabinet Ministers forwarding the Declaration of the National Convention on Revival of BSNL and MTNL and requesting to concede the demands of the BSNL MTNL organisations for strengthening the PSUs and making them profitable and to enable them to give better service to the customers.
Unions/Associations at field level are requested to meet the Members of Parliament in their area and urge them to support our cause and take the issue with the government, with information to General Secretaries and Forum

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

09 Thursday Jan 2014

Posted by in PSU, Telecom

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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.”

BSNL FOR BETTER SERVICE – GoM ‘ON REVIVAL OF BSNL’

16 Sunday Jun 2013

Posted by in BSNL - Better Service to the Nation

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The Government has now appointed a Group of Ministers (GoM) with Finance Minister P.Chidambaram as Chairman for ‘Revival of BSNL &  MTNL’. Other members of the committee are Dy. Chairman Planning Commission Dr. Montek Singh Ahluwalia, Communications Minister Kapil Sibal,  Commerce & Industry Minister, Anand Sharma, Minister for Information % Broadcasting Manish Tiwari and Minister of State for Personnel, Public Grievances & Pension  V.Narayanasamy.  The constitution with these heavy weight ministers shows that high priority has been given to the issue.

Of course, telecom has always been an important sector for the government. Hence it was always under the direct control of the government as a Department, first P&T and later Department of Telecommunications. The Cabinet Ministers who looked after the Ministry include celebrities like Rafi Ahmad Kidwai, Jagjivan Ram, I.K.Gujral,  C.M.Stephen, Shankar Dayal Sharma, Sushama Swaraj  and others. The growth of telecom infrastructure and services have always been a priority with the government, since it is closely connected with the growth of the country itself.

But that priority given earlier has been changed now, after the introduction of the neo-liberal policy for the last two decades. Now the priority is to allow the private players to maximise their profits at the cost of the PSU telecom companies and the country. The naked support to the MNCs and private companies can be seen in each and every decision taken by the government and the discrimination against BSNL & MTNL.

Hence the priority for the GoM on Revival of BSNL & MTNL will naturally focus on further growth of the private companies. The GoM is certain to be in favour of disinvestment and VRS both of which BSNL Employees Union and the Forum have been able to stop through united struggles. It may also decide some insignificant support to BSNL & MTNL with harsh conditions.

The workers can not allow such decisions which will gradually  put a lid on the existence of BSNL, as the government has now decided in the case of telegram services by deciding to close the same unceremoniously  by 15th July 2013.

It is why the Forum has given a detailed Memorandum to the GoM with effective and practical suggestions, which if implemented, will completely change the present scenario and will strengthen BSNL and ensure a better service. The Forum has also decided to organise programmes including an All India Convention at Delhi for wide publicity for our demands and support from the people. The workers have to come forward to implement the programmes and restore the great tradition of the Telecom services in the past.

GoM on Revival of BSNL & MTNL to meet on 11th June

05 Wednesday Jun 2013

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The Group of Ministers (GoM) appointed to recommend on the revival of BSNL & MTNL and headed by Finance Minister P.Chidmbaram, is scheduled to meet on 11th June as per media reports.

The Forum of BSNL Unions & Associations have already submitted its memorandum to the GoM, as also to the Prime Minister, Communications Minister, DOT and CMD BSNL. Forum has approached the leaders of political parties as also many Members of Parliament to get support to the proposals.

Since the meeting of the GoM is now fixed for 11th June 2013, all the Circle and District Secretaries of BSNL Unions & Associations are reminded  to meet the MPs of their constituency, give a copy of the Memorandum and request to take up the issue with Finance Minister and the government for acceptance and implementation of the same. Our comrades should take this responsibility seriously.

 

 

MTNL posts loss of Rs.1,985.93 cr. loss for 2012-13

31 Friday May 2013

Posted by in Telecom

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MTNL, the telecom PSU providing services in the metropolitan cities of Delhi and Mumbai, has posted a loss of Rs. 1,985.93 crore for the financial year 2012-13. This is more than the loss posted in 2011-12, which was Rs. 1,236.99 crore. MTNL is in loss for the last four years.

BSNL management has stated that the loss is due to the increased salary expenses of the employees. The employee expenses increased from Rs.1,236.99 last year to Rs. 1,927.33 crore this year. But this argument is faulty since it is normal for the salary increase in every year due to increments, pension contribution paid to the government etc. How can any management think that salary will not increase.

The real issue is that the revenue has not increased. It is the responsibility of the management to ensure that the business improves as also the revenue. The management has utterly failed in this and hence the loss. Further the government has been squeezing the company by imposing high charges for spectrum and increased contribution to pension by taking the maximum of the pay scale for calculation of the pension contribution to the government. Further the arrears to be collected are huge and probably a good amount will be due from the Central and State governments.

Whatever are the reasons for the loss, it is the responsibility of the government to ensure that the PSU is supported financially for its revival. Of course, the workers have got a major role for improving the services to the people.

Air India – 5 Experts appointed Part-time Directors

27 Monday May 2013

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As part of the revival process of the ailing Air India, the government has appointed 5 outside experts as Part-time Directors of its Board. It is stated that this is being done for its Turn-around and Financial Restructuring Plans.

On the one side, government wants cost-cutting and on the other side, government itself is taking decisions to increase the expenditure by appointing consultants, experts etc. spending heavy amount for the same. We have seen what these experts and consultants are recommending. It is only what the government wants like VRS, disinvestment, selling of the land assets of the company etc.

Any how, let us see what these experts are going to suggest.