BSNL, MTNL losses at Rs 3,785 crore & Rs 1,567 crore: Government
NEW DELHI: State-owned telecom firms BSNL and MTNLBSE -1.72 % have
incurred losses of Rs 3,785 crore and Rs 1,567 crore till September 30 in the
current financial year and steps are being taken to revive them, government
said today.
The losses are on account of decline in revenue and increase in
expenditure, Minister of Communications and IT Ravi Shankar Prasad said in a
written reply to the Lok Sabha.
At present, there is no proposal for disinvestment in MTNL and BSNL
though the government is in the process of revival of the two firms through
various short term, medium term and long term measures, he added.
"The long term measures, including merger of BSNL and MTNL, would
attempt to position these PSUs to emerge as market leaders in the converged
telecommunication market," he said.
BSNL's provisional and unaudited loss up to September 30 for 2014-15
fiscal stood at Rs 3,785 crore, whereas that of MTNL was Rs 1,567 crore, he
said.
BSNL had incurred Rs 7,019 crore loss in 2013-14, Rs 7,884 crore in
2012-13 and Rs 8,850 crore in 2011-12, whereas MTNL had reported a loss of Rs
4,109 crore in 2011-12 and Rs 5,322 crore in 2012-13.
The revenue has declined for reasons including fixed to mobile
substitution leading to surrender of wireline connections, delay in expansion
of GSM capacity, perceived poor quality of customer services and high reduction
in income from sources other than services, the minister said.
The expenditure of these firms has increased because of legacy workforce
whose salary and wages are more than 50 per cent of revenue, increasing repair
and maintenance costs and high interest burden in case of MTNL.
Prasad said: "MTNL has shown a profit of Rs 7,825 crore in 2013-14
mainly due to write back of provisions on account of pensionary liabilities and
spectrum amortisation costs after decisions of government taken for revival of
MTNL."
The government has taken several measures in an attempt to bring the two
state-run companies out of financial distress.
The measures include treatment of pensionary liabilities of government
employees absorbed in MTNL who opted for combined service pension on parity
with similar employees in BSNL, waiver of government loan to BSNL involving an
amount of Rs 1,411 crore and financial support of Rs 492 crore to MTNL towards
payment of minimum alternate tax.
"The government has given financial support of Rs 6,724.51 crore to
BSNL and Rs 4,533.97 crore to MTNL on surrender of broadband wireless access
spectrum," Prasad said.
He added that the two firms are separately preparing a revival plan for
increasing revenue potential, identifying business opportunities,
organisational restructuring to grow into customer-centric companies and
developing human resources strategy in line with restructured organisational
vision.
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