With an aim to enhance the revenues of Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited, the government has proposed that union ministries, public sector undertakings and autonomous bodies deploy the telecom services provided by the two operators.
Addressing the Rajya Sabha, Killi Kruparani, minister of state for telecommunications and IT, stated that the government had constituted a an empowered group of ministers (EGoM) on April 17, 2013 to recommend short-term, medium-term and long-term measures for revival of BSNL and MTNL.
As per the recommendations, the principal reasons for the increasing losses of BSNL and MTNL are due to sharp decline in revenue and increase in expenditure. The revenues of both the operators are declining due to substitution of fixed wireline to mobile wireless, high competition in the mobile wireless sector, payment towards 3G and broadband wireless access (BWA) spectrum charges. Further, a decrease in the average revenue per user in the mobile wireless segment is also affecting the revenues of the two operators.
The EGoM has further stated that the principal reason for the increase in expenditure for the two operators is on account of their large legacy workforce as a result of which employee expenses are currently at around 50 per cent of revenues for BSNL and 103 per cent for MTNL. To revive loss-making operators, EGoM has suggested pension dues to be paid to ex-employees, surrender of BWA spectrum by BSNL in six circles and MTNL in Delhi and Mumbai for which operators will be refunded.
Currently, the EGoM?s recommendations have been placed before the cabinet for approval.
