BSNL, MTNL losses at Rs 3,785 crore & Rs 1,567 crore: Government

By PTI | 3 Dec, 2014, 05.03PM IST

NEW DELHI: State-owned telecom firms BSNL and MTNLBSE -2.41 % 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.