DoT plans to provide Rs 30 billion as subsidy to BSNL and MTNL

The Department of Telecommunications (DoT) plans to provide an annual subsidy of about Rs 30 billion to Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited (MTNL) to sustain their operations, according to news reports.

The subsidy will be provided to BSNL to support its operations in rural areas from the Universal Services Obligation Fund (USOF), while MTNL will be provided support for its higher pension and other retirement payouts from the licence and spectrum fee, which both companies give to the government.

Initial estimates by DoT suggest that BSNL incurs losses of about Rs 20-25 billion from its landline business, the majority of which are social commitments in rural areas and MTNL?s pension amount stands at Rs 3-3.50 billion annually. However, DoT has asked BSNL to quantify the exact amount of loss it incurs due to its social obligations. DoT plans to implement this proposal by this year.