BSNL and MTNL have cumulatively incurred Rs 9,509 crore in losses during 2019-2020 (up to September 2019), Ministry of Communications informed Lok Sabha on November 20. Telecom Minister Ravi Shankar Prasad said that stiff competition in mobile segment, high employee cost and absence of 4G services were the major reasons for these losses.
Prasad also said that the Union Cabinet, in its meeting on October 23, 2019, had approved a revival plan for BSNL and MTNL. This includes Rs 29,937 crore for VRS (voluntary retirement scheme) which will reduce staff costs. The government will also fund the full cost of spectrum (4G) worth Rs 14,115 crore for BSNL and Rs 6,295 crore for MTNL through equity infusion and subscription to non-cumulative preferences shares respectively.
Other measures include administrative allotment of spectrum to BSNL/MTNL for providing 4G services, monetisation of land/building and tower/fibre assets of the two PSUs, debt restructuring by raising of Sovereign Guarantee Bonds, and merger of BSNL and MNTL.
In a separate response to MP Prataprao Patil Chikhilikar’s question on BSNL, Prasad informed the house that as of August 31, 2019, the market share of BSNL in landline and mobile services was 49.67% and 9.98% respectively. This is because, unlike other telecom service providers, BSNL does not have a separate spectrum for 4G services, he said.