THE MINISTER OF COMMUNICATIONS AND INFORMATION TECHNOLOGY (SHRI KAPIL SIBAL)
(a) to (e) A Statement is laid on the Table of the House.
STATEMENT TO BE LAID ON THE TABLE OF THE LOK SABHA IN RESPECT OF PARTS (a) TO (e) OF
LOK SABHA STARRED QUESTION NO. 121 FOR 6TH MARCH, 2013 REGARDING “MARKET SHARE AND
REVENUE OF MTNL AND BSNLâ€
(a) & (b) The details of revenue, profit/loss and market share of Bharat Sanchar
Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) during the last three
years of 2009-10, 2010-11, 2011-12 and for the current year 2012-13 upto 31.12.2012, are
as follows:
As on Total Revenue Profit/Loss Market Share (%age) (In Rs crores) (In Rs crores) BSNL MTNL BSNL MTNL BSNL MTNL
31.3.2010 32,045 5,058 -1,823 -2,611 15.66 14.21
31.3.2011 29,688 3,992 -6,384 -2,801 13.83 11.29
31.3.2012 27,934 3,624 -8,551 -4,110 12.70 11.00
31.12.2012# 19,305 2,682 -6,536 -3,335 13.51 11.30
# Figures for Revenue and Profit/Loss are provisional
The reasons for the rising losses of BSNL and MTNL are due to decline in revenue and
increase in expenditure. The reasons for the decline in revenue are as follows:
# Fixed to mobile substitution
# Stiff competition in mobile sector.
# Payment towards 3G & Broadband Wireless Access (BWA) spectrum charges resulting in
reduction in interest income.
# Decrease in Average Revenue Per User (ARPU) in mobile sector.
The reason for the increase in expenditure is mainly due to wages of large legacy work force.
(c)& (e) Department of Telecommunications (DoT) and the senior management of both PSUs
review the performance of BSNL and MTNL regularly.
Some of the Steps taken by BSNL and MTNL to increase their revenue and market share
are as follows:
BSNL
# Strengthening of sales and distribution system.
# Special consumer retention camps.
# Monitoring of Quality of Service (QoS) parameters to adhere to the benchmarks
stipulated by Telecom Regulatory Authority of India (TRAI).
# Continuous improvement in customer care through Project smile.
# Introduction of various attractive tariff plans & improved marketing strategies.
# Provision of Value Added Services including broadband services, Intelligent Network
Services and broadband based value added services like Video/Games/Music on demand etc.
MTNL
# Plan to commission Convergent billing. This system will provide one bill for all
services to a subscriber and address customer request for services, tariff etc.
# Reviewing of tariff for various products and services.
# Measures to facilitate easy payment of telephone bills.
# Online system for booking of different services and complaints for landline and mobile.
# MTNL is having Sanchar Haats in Delhi and Customer Service Centers (CSCs) at Mumbai,
for customers to get various services like registration for new service, duplicate bills of
cellular connection, bill payment, Virtual Calling Cards etc.
(d) The Government had set up a Committee in January 2010 under Shri Sam Pitroda to review
the functioning of Bharat Sanchar Nigam Limited (BSNL). The important recommendations of the
Sam Pitroda Committee inter alia were as follows:
# Focus on selection of the best professionals from the market at market rates.
# Establish four independent business units for Fixed access, Mobility, Enterprise and
New businesses.
# Complete ITS (Indian Telecom Service) absorption process.
# Retire or transfer around 100K employees through processes like VRS (Voluntary
Retirement Scheme).
# Change procurement processes and procedures substantially using tools such as
e-Procurement, vendor rating, rate running contracts, schedules, etc.
# Disinvest 30% through Indian strategic investor and at Initial Public Offering (IPO)
to return 10% to the government and use 20% for employee VRS, expansion and operation.
# Provide 30 million new high speed broadband connections in the next three years.
# Unbundle local loop for public and private companies.
# Proactively offer sharing of active and passive infrastructure to other operators.
# Enhance rural communication facilities by connecting 2,50,000 panchayats.
# Create a separate subsidiary company for tower related infrastructure.
# Create a separate subsidiary to hold land bank and other real estate assets.
# Establish a BSNL venture fund to invest and/ or acquire small appropriate technology
companies.
Telecom Commission deliberated on the recommendations of Sam Pitroda Committee on improving
the performance of the BSNL on 30.11.2010 and decided that:
(i) Taking professionals from market at market rates, changing Board Constitution or
separating Chairman and Managing Director posts may not be feasible in only one Public
Sector Undertaking (PSU) as it may trigger protest from BSNL and demand for similar treatment
by other PSUs.
(ii) Listing & disinvestment of BSNL would not be appropriate at the current time as company
is on downward performance path & disinvestment may not realize true value of the company.
In absence of listing, option of giving stocks as incentive, to key management is not available
for the present.
(iii) VRS across the board may not be required; BSNL could examine option of VRS for select
categories in context of financial burden and cost/benefit to the company.
(iv) On adopting Managed capacity or managed services model, it recommended that the Board
of BSNL may take a view.
(v) Unbundling of the local loop being a commercial decision should be decided by BSNL
Board after critically examining the issue.
(vi) All other issues flagged by Pitroda Committee are operational and commercial issues
of BSNL for which the Board is competent to take decisions.
The Commission also observed that some of the above issues could be revisited if the need
arose in the context of any major policy decisions involving restructuring and repositioning
of BSNL.
