Coming soon, a lifeline for MTNL and BSNL

Communications and IT minister Ravi Shankar Prasad

FINALLY, the government-owned telecom majors BSNL and MTNL will get a lifeline as the new Narendra Modi-led BJP government will initiate steps to revive the ailing telecos. This is to check the gradual decline in the fortunes of the two companies that once were the crowning jewels of India telecom revolution.

Communications and IT minister Ravi Shankar Prasad said that steps...

will be taken on a priority basis to revive the two PSUs that have failed to ride the boom in the Indian telecom sector even as private operators.

He said that improvement of performance of the two companies was a key area of concern for his ministry, He will see to it that the services of the telecos are improved for better consumer satisfaction.

The minister emphasized that improvement of BSNL and MTNL both in terms of performance and infrastructure would be a key area of priority. The government would be monitoring the functioning of the two PSUs for which the minister has directed for installation of suitable equipment in his chamber.

He further stated that around 2,50,000 village panchayats in the country would be provided broadband connectivity within a period of three years.

Talking to media in Sanchar Bhawan in the Capital on June 17, the minister said that there was a target of covering at least 50,000 gram panchayats within this financial year and 1,00,000 village panchayats each in the years 2015-16 and 2016-17.

He also said that the government was committed to improving the telecom network in the north-eastern region and around 8,000 mobile towers would be installed at an approximate cost of Rs.5,000 crore.

BSNL has been incurring losses since 2009-10. BSNL’s profits started dipping after 2004-05, when it had made net gains of Rs 10,183 crore. Its losses stood at Rs 8,198 crore for 2012-13 against Rs 8,851 crore in 2011-12. The company had reported a loss of Rs 1,093.72 crore in the same period a year ago. Likewise, in 2012-13, MTNL recorded a net loss of Rs 5,321.12 crore on annual revenue of Rs 3,428.6 crore. The last time MTNL made a profit was in 2008-09, when it posted a net of Rs 205.9 crore on revenue of Rs 4,496.2 crore. After reporting widening of losses for nine quarters in a row, MTNL reported narrowing of its standalone net loss to Rs 947 crore for the July-September 2013.