Even as the state-owned telecom operator’s expenditure and income both fell by thousands of crores, BSNL was able to shave ₹1 crore off of its losses compared to the previous financial year in 2017–18. That represents just a 0.02% change, from ₹4,786 crore to ₹4,785 crore. The government disclosed the change in a Lok Sabha answer to MPs Kaushalendra Kumar and Devusinh Chauhan. The numbers are gloomy for BSNL, which spends around half of its earnings on salaries to employees. Compare that to Airtel, whose employee benefit expenses only amounted to a little under 5% of revenue in Q1FY19. More than that, the telco is also being affected by the price war among telcos following Jio’s entry.
MTNL also in losses
The other state-owned telco, MTNL, is also in losses. MTNL operates only in Mumbai and Delhi in India, and in Mauritius, so its scale of cash flow is significantly lower than that of BSNL. Interestingly, MTNL’s losses have remained completely unchanged, while their spending and income have reduced by the hundreds of crores.
How govt helped BSNL, MTNL stay afloat
“Since BSNL has incurred losses consecutively for the last three years, [it] has been declared as “Incipient Sick” as per the guidelines of Department of Public Enterprises (DPE),” Telecom minister Manoj Sinha said in the parliamentary reply. “Accordingly, action has been initiated by the Department of Telecommunications (DoT) for preparation of revival/restructuring plan of BSNL.” Sinha attached a detailed list of financial assistance given to BSNL and MTNL in loan waivers and financial support in operations:
- 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.
- Refund of surrendered BWA (Broadband Wireless Access) spectrum in 6 service areas held by BSNL. Under this head, Rs. 6724.51 crore was refunded to BSNL through budgetary resources.
- 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.
- Refund of Rs. 169.16 crore to BSNL on account of surrender of CDMA (Code Division Multiple Access) spectrum.
- Optical Fibre Cable based Network for Defence Services (NFS Project) has been given to BSNL on nomination basis at the cost of Rs.24,664 crore.
- For execution of BharatNet project, Government has provided Rs.5744 crore in Phase-I and has earmarked Rs.6500 crore in Phase-II to BSNL.
- 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 an 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.
- Submarine Optical Fiber Cable Project at the cost of Rs.1900 crore has been assigned to BSNL on nomination basis for providing connectivity to the Andaman and Nicobar Islands.
- Work of setting up of 25000 Wi-Fi Hotspots at Rural Telephone Exchanges at the cost of Rs.940 crore has been given to BSNL.
- Work of setting up of Satellite Gateway at the cost of Rs. 68 crore has been given to BSNL on nomination basis.
- Notional loan of Rs. 1411 crore to BSNL which was due to be paid to the Government was waived-off.
- Refund of surrendered BWA (Broadband Wireless Access) spectrum in two service areas held by MTNL. Under this head, Rs. 4533.97 crore has been refunded to MTNL through bonds.
- The pension liability of MTNL staff who were absorbed from Department of Telecommunications (DoT), has been taken over by the Government.
- Financial support of Rs. 492.26 crore was given to MTNL on account of liability arising from levy of Minimum Alternate Tax (MAT).
- Refund of Rs. 458.04 crore to MTNL on account of surrender of CDMA (Code Division Multiple Access) spectrum.
- Provision of High Speed Internet on Fiber To The Home (FTTH) and Wi-Fi at the residences of Hon’ble MPs. The Project cost of Rs 43.2 Crore was funded by DoT.