Government auditor CAG on Thursday (August 25) said that failure of state-run BSNL to revive landline telephony resulted in unexploited investment of over Rs 24,000 crore for the loss making PSU. BSNL had spare capacity of 151.94 lakh lines out of equipped capacity of 546.32 lakh lines, resulting in investment of Rs 24,784 crore. "Thus, failure of the BSNL to revive basic telephony resulted in unexploited investment of over Rs 24,000 crore on spare capacity of over 1.51 crore lines (March 2010) for the entire basic telephone network," CAG said in its report.
Basic telephony has been strategically important for the PSU, as around 70 per cent of its revenue was generated from it over the years. However, subscriber base and revenue generation from basic telephony had declined from Rs 32,355 crore in 2005-06 to Rs 19,599 crore in 2009-10. Further, the basic telephony segment had been incurring losses from 2006-07 onwards, which impacted the financial health of the company and during 2009-10, it had run into the red. Till March 2010, the company had invested Rs 89,118 crore to build up equipped capacity of 546.32 lakh lines against the working connections of 339.75 lakh lines for its basic telephony network.
Though the basic service customer base of BSNL started declining from 2005-06 onwards, but only in 2008 BSNL appointed IMRB for determining the reasons for surrendering of landlines. However, the CAG recommended that BSNL should have a time bound programme and fix milestones for increasing its landline subscribers through aggressive marketing strategy, competitive tariffs plans and improving its quality of service. BSNL should revamp its tariffs plans to revive the demand for landline telephony and improve the capacity utilisation of telephone exchanges.
Broadband should be marketed effectively to attract new customers and increase customer base of land line telephony. Tariffs structure for PCO market must be redesigned to ensure retention and enhancement of PCO base. Subscriber base and revenue from basic telephone service of BSNL declined drastically over the last five years as also its overall revenue. Lack of dynamic tariff structuring, slack marketing efforts especially in the face of competition from private operators, lack of quality in service were major contributing factors for erosion of customer base and revenue of BSNL, the report added. Erosion in subscriber base resulted in accumulation of spare exchange capacity and consequent unexploited capital investment. ... TOI
Basic telephony has been strategically important for the PSU, as around 70 per cent of its revenue was generated from it over the years. However, subscriber base and revenue generation from basic telephony had declined from Rs 32,355 crore in 2005-06 to Rs 19,599 crore in 2009-10. Further, the basic telephony segment had been incurring losses from 2006-07 onwards, which impacted the financial health of the company and during 2009-10, it had run into the red. Till March 2010, the company had invested Rs 89,118 crore to build up equipped capacity of 546.32 lakh lines against the working connections of 339.75 lakh lines for its basic telephony network.
Though the basic service customer base of BSNL started declining from 2005-06 onwards, but only in 2008 BSNL appointed IMRB for determining the reasons for surrendering of landlines. However, the CAG recommended that BSNL should have a time bound programme and fix milestones for increasing its landline subscribers through aggressive marketing strategy, competitive tariffs plans and improving its quality of service. BSNL should revamp its tariffs plans to revive the demand for landline telephony and improve the capacity utilisation of telephone exchanges.
Broadband should be marketed effectively to attract new customers and increase customer base of land line telephony. Tariffs structure for PCO market must be redesigned to ensure retention and enhancement of PCO base. Subscriber base and revenue from basic telephone service of BSNL declined drastically over the last five years as also its overall revenue. Lack of dynamic tariff structuring, slack marketing efforts especially in the face of competition from private operators, lack of quality in service were major contributing factors for erosion of customer base and revenue of BSNL, the report added. Erosion in subscriber base resulted in accumulation of spare exchange capacity and consequent unexploited capital investment. ... TOI
