The Standing Committee on Information Technology has asked the government to allot 4G spectrum to state-run telecom service providers BSNL and MTNL “at the earliest” so that they can compete and survive in the market.
It noted that the voice market is already saturated and now the demand is ‘data’. “The Committee is of the view that both BSNL and MTNL will lose the data market, if they are not given 4G services soon,” it said in a report tabled in the Parliament yesterday. The telcos have already submitted their proposals for 4G, which are being reviewed by the Ministry of Communications. In addition, BSNL and MTNL have also asked for another block of 5 MHz spectrum in the 2100 MHz band.
Notably, BSNL’s chairman and managing director Anupam Shrivastava recently said that the company was planning to launch 4G service by the end of 2018. It also soft-launched 4G service in select locations of Idukki district in Kerala in February this year. The telco had utilised existing spectrum for this launch.
In its report, the committee also reviewed the revenues and costs of the two telcos.
Revenue receipts of BSNL declined in all segments except passive infrastructure. This was mainly because of hyper competition in the telecom industry and huge salary cost, as per the report. During 2017-18, BSNL set a revenue target of Rs.26,500 crore. However, till December, its total income was Rs 16,268 crore while expenditure was Rs.24562 crore, incurring a loss of Rs 8,294 crore. Year 2018-19 is also expected to be loss-making, with projections of Rs.28,500 crore in revenue and Rs 35,850 crore in expenditure.
Even so, BSNL remains the least indebted company in the industry, with a total debt of Rs 9000 crore.The telco is planning to increase revenue by providing consultancy services to other government departments, and selling its land at prime locations.
The report said, however, increasing revenue would be difficult and asked BSNL to cut losses by decreasing expenditure. Pointing to its huge salary burden, the committee said that BSNL’s proposal for voluntary retirement scheme should be accepted at the earliest. Further, the Ministry’s Department of Telecommunication is looking to position BSNL as the foremost rural player in BharatNet project.
The report noted that MTNL was severely indebted with a Rs 16870.40 crore in outstanding debt as of December 2017. In 2018-19, the telco is expected to incur a loss of Rs 3354.01 crore, and is in a “dire state” as per the report.
Revival of the company should not be delayed any further, it said. Such a plan was prepared by Deloitte for MTNL, and the report suggested for it to be examined by an internal committee of the Department of Telecommunication. “Delay in the process is only leading to further sliding of the revenues,” the report said.