Loss to BSNL on rural landlines was more than Rs 8000 crore per year-Compensation
given was only Rs 2000 crore per year
Earlier the BSNL submitted that the loss incurred by it for
the rural landlines was Rs 8774 crore per year. But the TRAI recommended to
extend a compensation of Rs 2000 crore only to BSNL for the losses incurred by
it on rural landlines for a period of 3 years, with effect from 2008-09.
Now the BSNL requested lowest and even it is not agreed
Now that the 3 year
period is over, the BSNL submitted to the TRAI for a compensation of Rs 2580
crore per year, with effect from 2011-12 onwards. But the TRAI, in its
consultation paper No.9/2012 dated 26.04.2012 on support for rural wireline
connections installed before 01.04.2012, has proposed for a nominal compensation
of Rs 1500 crore for the year 2011-12 and Rs 1250 crore for the year 2012-13.
Pressure exerted by Indian and Foreign big capitalists
It is a fact that the BSNL is facing a loss of about Rs 8000
crore per year on its rural landlines which are commercially unviable, but
maintained as a social obligation. Without the rural landline network of BSNL,
it would have been impossible to provide internet/broadband services to rural
areas. Therefore it is the responsibility of the Government to fully compensate
BSNL for the losses incurred on the rural landlines. But due to the pressure
from the foreign and Indian big capitalists in telecom sector, the Government
has been continuously violating the assurances given at the time of the
formation of BSNL for its financial viability.
Facts establishing the hollowness of the TRAI’s
recommendations
The following facts establish how the TRAI recommendations
and the consequent orders of the Government based on those recommendations are
making BSNL more and more unviable.
- “Prior to IUC regime, BSNL had entered into revenue sharing arrangements with private operators as per the terms and conditions of the Licences granted to them which were also accepted by TRAI and prescribed in its various regulations. These revenue sharing arrangements were reasonably compensating BSNL for the cost of its various networks. As per these arrangements, wireless operators (WLL as well as mobile operators) were required to pass through their 95% i.e. Rs 1.14 per Metered Call Unit (MCU), revenues while making a call to the subscribers of fixed line operators as per the terms and conditions of their license. Further, fixed line operators were not required to pay any charges to mobile operators while making a call from former's network to latter’s network.” (BSNL’s comment on TRAI’s consultation paper dated 21.01.2008 on ADC)
- The “BSNL could have recovered an amount of
approximately Rs 8000 crores per annum from the cellular operators and
NLD/ILD operators if the pre-IUC regime would have continued. Thus, from
the 2003-08, BSNL could have collected an amount of Rs 40000 crores from
the Cellular Operators/NLDOs/ILDOs. Further, BSNL could have saved an
amount of approximately Rs 9478 crores paid to Basic Service Operators
(BSOs)/Cellular Mobile Service Providers (CMSPs) during the same period as
per the IUC regime”. (BSNL’s
comment on TRAI’s consultation paper dated 21.01.2008 on ADC)
- “However, during the same period, as per the
IUC regime, BSNL has received an IUC (including ADC) amount of
approximately Rs 29344 crores only. Thereby, there has been a loss of
approximately Rs 20133 crores to BSNL due to implementation of IUC regime.
This is because TRAI has not compensated BSNL on actual cost basis while
calculating ADC in the various IUC regimes which is against the originally
agreed principles of cost based IUC regime. BSNL has been representing
against these arbitrary and unjustified decisions of TRAI from time to
time but no relief has been provided to BSNL till date”. (BSNL’s comment
on TRAI’s consultation paper dated 21.01.2008 on ADC)
- “The estimated payable amount of ADC by TRAI
for BSNL was much lower than the ADC admissible to BSNL on the actual cost
basis. Further, even the amount of ADC envisaged by the TRAI in the
different IUC Regulations has not been received by BSNL”. (BSNL’s comment
on TRAI’s consultation paper dated 21.01.2008 on ADC)
- As per the calculations of the BSNL submitted
in its comments on the Consultation Paper dated 21-1-2008 of the
TRAI, during 2003-2008 the total
shortfall of ADC received by the BSNL in comparison to the ADC
admissible was Rs 44210 crore.
- Therefore the BSNL requested the TRAI to make
“fresh calculations on actual cost basis for the admissibility of ADC to
wireline services and its continuation”. As per the calculations of the
BSNL, there was “a requirement of ADC amount of approximately Rs 14000
crore for the year 2008-09” and “BSNL needs Rs 8774 crores per annum to
just sustain the operations of its basic services in rural areas”.
- The BSNL further submitted that the TRAI’s
approach treating ADC as a transient regime for facilitating the incumbent
(BSNL) to transit from monopoly to competitive regime and give adequate
time for tariff rebalancing was contrary to the actual purpose of ADC and
was contrary even to the TRAI’s understanding at the time of introduction
of cost based IUC regime in India in 2003. It was a known fact that the
rebalancing of the tariffs of wireline services on cost basis would not be
possible in the competitive regime and any increase in tariffs of rural
landlines would not be sustainable.
- BSNL also submitted , “As
per Authority’s own calculations, the cost of wireless networks is less than
1/3rd
of the cost of wireline networks. Accordingly, the cost of
termination of a call in wireless networks should also be 1/3rd of
wireline network. However, TRAI has prescribed same termination charges of
Rs. 0.30 per minute for both wireless as well as wireline networks in its
Regulations. If the cost of wireless network is 1/3rd of
the cost of fixed network, then the cost based termination charges for
wireless services should have been prescribed as Rs.0.10 per minute only. The uniform termination
charges have led to the undue enrichment to Cellular and WLL(M) operators.
It is an undue advantage being given to the Cellular/ Wireless service
operators to the disadvantage of BSNL. If calculated, TRAI may find that
it is more than Rs. 7000-8000 crores per annum. It is beyond
comprehension as to why such huge undue advantage has been given to
the cellular and WLL(M) operators. Are they providing any below cost
services and need compensation ? Is it not a form of ADC ? The plea
given for this undue enrichment by the Authority that this additional amount
will help cellular operators expand their business and improve quality of
service, is totally unjustified and contrary to the cost based IUC regime.
Authority may kindly note that provisioning of such implicit subsidy in
the form of higher than the cost based termination charges is against the
laid down principles of the cost based IUC regime. This favourable
regulatory advantage of higher termination charges to the cellular
operators is enabling them to provide lower tariffs thereby causing churn
of BSNL’s customers and traffic and leaving no scope for any rebalancing
of tariff by BSNL”. (BSNL’s comment on TRAI’s consultation
paper dated 21.01.2008 on ADC)
- BSNL further submitted that the purpose of
ADC and USOF (Universal Service Obligation Fund) were “entirely different
to each other”. USO Fund was limited to to remote and rural areas with
greater focus on VPTs whereas ADC has to be provided to all the wireline
connections provided below the actual costs. It was earlier decided by the
TRAI that ADC should not be funded from USOF since both are different.
Relevant portions of the Consultation Paper of the TRAI dated 23.09.2002
on tariffs of basic services clearly mentioned that “the target of the USO
fund is at present limited to remote and rural areas with greater focus on
VPTs, while the access deficit arises in the case DELs in general i.e even
in urban SDCAs, because of rentals being less than the level computed by
cost based methodology”. Thus ADC and USOF are entirely different and ADC
cannot be reduced or abolished by granting a pittance in the name of
support for rural wirelines. As long as the rentals of landlines are less
than the level of their cost, and as long as it is not possible to
increase the rentals of landlines to the level of their cost, ADC has to
be continued.
TRAI ignored all these facts and recommended drastic
reduction in the compensation to BSNL
In spite of this request from BSNL based on actual facts,
the TRAI did not increase the ADC for BSNL. On the other hand it recommended
for abolition of the ADC and a support of Rs 2000 crore per year to BSNL for a
period of 3 years with effect from 01.04.2008 to compensate the losses incurred
by it for the rural wirelines installed before 01.04.2002.
It also recommended to grant this amount from
USO Fund by amending the Indian Telegraph (Amendment) Rules 2004 framed under
the Indian Telegraph Act, 1885 as below:
“ Provided from the financial year
2008-09 for household Direct Exchange lines installed prior to 1st
day of April, 2002, eligible service provider shall be reimbursed Rupees two
thousand crores (Rs 2000 crore) per annum for a period of three years.
Provided that the Central Government
may after seeking recommendation of TRAI, on review; continue the reimbursement
at the same rate or at a lower rate beyond three years, for a period as may be
decided by the Central Government from time to time.”
Thus instead of the requirement of Rs 14000
crore per annum as ADC and the requirement of Rs 8774 crore per annum for
sustaining the rural landlines, the TRAI abolished the ADC, granted Rs 2000
crore for 3 years with effect from 2008-09 and. It failed to show any reason
for treating the ADC and USOF together and subsuming the ADC in USOF. It failed
to justify how it subsidized the cellular operators by allowing termination
charges on mobile networks on par with the termination charges on wireline
networks when the cost of termination of a call in mobile network is only
one-third of the termination of the call in the wireline network. It has shown
no reason for calculating the compensation limited to the working wirelines
that were installed before 01.04.2002, instead of taking the cost of the entire
rural landline net work as the basis for calculating the loss. Without any
sufficient ground, it ignored the submission of BSNL that it was facing a loss
of Rs 8774 crore per annum on its rural wirelines. Moreover, it recommended that
not only during 2008-2011, but also thereafter, the compensation to BSNL for
the losses on rural landlines should not be more than Rs 2000 crore.
Fresh proposal of the TRAI for a nominal
compensation making BSNL totally unviable
Now vide its consultation paper dated
26.04.2012, the TRAI has proposed for a
support of only Rs 1500 crore for 2011-12 and 1250 crore for the year 2012-13
to BSNL to compensate for the losses incurred by it on the working rural wire
lines installed before 01.04.2002. The
aim of these recommendations appears to be for making BSNL completely unviable.
Unjustified proposal of the TRAI
As per the above said recommendations dated
27-3-2008 of the TRAI, the rural DELs installed by BSNL before 01.04.2002 were
90 lakhs. At the rate of the annual deficit of Rs 4876/- which is the deficit
per line calculated by it vide its consultation paper dated 26.04.2012, the
total deficit for these 90 lakh lines would be Rs 4388 crore. Out of these 90
lakh lines installed before 01.04.2002, only 40 or 50 lakh lines may be working
now. But the actual expenditure would be incurred for the entire indoor and
outdoor plant of rural exchanges, irrespective of the lines working.Therefore
the loss should be calculated on the basis of the acual expenditure for
maintaining the entire rural network-the revenue received on the rural
services. Hence there is no basis for
limiting the calculation of the deficit to the working lines installed before
01.04.2002.Accordingly, the calculation of the deficit of Rs 2580/- for the
year 2010-11 submitted by BSNL and its drastic reduction to Rs 1500 crore for
2011-12 and to Rs 1250 crore for 2012-13 by the TRAI are nothing but a drastic
underestimation of the actual losses suffered by the BSNL on the rural land
lines.
In fact, the estimated annual loss to BSNL will
be to the extent of more than Rs 8000
crore on rural landlines, as mentioned by BSNL earlier in its’ response to the
TRAI’s consultation paper dated 21-1-2008. Moreover, the ADC cannot be
abolished in lieu of the compensation for rural landlines, since they are
entirely different.
TRAI should review its approach and recommend
for full compensation to BSNL
Therefore the TRAI should review its approach
on this issue, treat the ADC and USOF as entirely different, and should
recommend for fully compensating BSNL for the wirelines, bth urban and rural,
in view of the facts detailed above.
Therefore we request the TRAI to reconsider its
approach on this issue and recommend the full compensation of about Rs 8700
crore per year to BSNL to compensate the
losses it is incurring on the rural landlines.
----P.Asokababu
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కామెంట్ను పోస్ట్ చేయండి