A                PROJECT STUDY REPORT                            ON                           BSNL,     “Financial Overvie...
As the part of my MBA curriculum I was required to undergo summer training in abusiness organization for eight or six week...
ACKNOWLEDGEMENTI express my sincere thanks to my project guide, Mrs. Rekha Tambi (Sr. Executive-HR & ES) for guiding me ri...
EXECUTIVE SUMMARYThe project is an extensive report on how the BSNL companymarkets its strategies and how the company has ...
ContentsS.no.   Particulars                              Pages1.      Introduction2.      Financial Overview4.      Teleco...
Company Proflie       6
IntroductionType                 Communication Service ProviderAvailability         Countrywide except Delhi & MumbaiOwner...
1.2Objective of Study:      The main objective of this study is to carry on brief study on “Financial   Overview    Of   T...
was opened up by the Government for Private investment, therefore it becamenecessary to separate the Governments policy wi...
BSNL Broadband   3.   Internet: BSNL is providing internet as dial-up connection (Sancharnet)        and ADSL-Broadband Da...
Former Indian Communications Minister Thiru Dayanidhi Maran had declaredyear 2010 as "Year of Broadband" in India and BSNL...
Although in recent past there have been tremendous improvement in working ofBSNL but still it is much below the Industrys ...
VISION      TO   BECOME THE LARGEST TELECOM    SERVICE PROVIDER   IN   SOUTH   EAST   ASIA.                               ...
To provide point of interconnection to other service provider as per their      requirement promptly.      To facilitate R...
In pursuance of the Memorandum of Understanding dated 30th September2000 executed between Government of India and BSNL, al...
zones of operation, which are disintegrated and provide only basic solutions. Theindustry standard for revenue leakage is ...
Management Profile                               Chief General Manager                                       (CGM)        ...
Products  •   BSNL LANDLINE                       PHONE PLUS SERVICE                       NEW TELEPHONE CONNECTION     ...
   USO FUNDED RURAL BROADBAND                     FAQ                     CHECK USAGE•   BSNL MANAGED NETWORK SERVICES•...
   TARIFF•   EPABX               EPABX               FREE EPABX               TARIFF               CENTREX           ...
Profile of company top ManagementDirector (Operations) - Shri Rajesh WadhwaShri Kuldeep Goyal has taken over as Chairman &...
PROVISION AND PERFORMANCE OF TELECOM NETWORKS AND PARTICIPATED IN MEETING OF                          ITU-TSTUDY GROUP 2  ...
CORPORATE         INCLUDING     PRIVATE     COMPANIES .          HE     WAS     A    MEMBER    OF    RAKESH MOHANINFRASTRU...
CONFERENCE        IN I NDONESIA .   HE     WAS ALSO DEPUTED AS         PROJECT DIRECTOR, TCIL        TOSULTANATE-OF-OMAN  ...
NUMBER OF ATTRACTIVE TARIFF PACKAGES   & PLANS   WHICH SHALL FURTHER STRENGTHEN ITSSUBSCRIBER BASE .2. CELLULAR MOBILE TEL...
4. Intelligent NetworkIntelligent Network Services is a service that incorporates several value addedfacilities, thoroughl...
2. (a) VILLAGE Public Telephones (VPTs) & RCPs:-BSNL, in its unstinted efforts to make the slogan ‘Connecting India’, a re...
To improve the operational efficiency of CCS 7 signaling, stand-alone signalingtransfer point (SSTP) equipment is being pr...
COMPREHENSIVE AMC,            WHICH INCLUDES HARDWARE AND SOFTWARE MAINTENANCE AND UPGRADE ,HAS BEEN ARRANGED WITH THE RES...
i)          SAME    DAY                            75.78                  77.30                            ii)         NEX...
LINE /   MPLS. YOUR COMPANY                 HAS PROVIDED BANDWIDTH FOR              WAN    NETWORK OF CORPORATELIKE     SB...
BSNL     HAS ALSO PLANNED TO LAY THE UNDERSEA SUBMARINE CABLE BETWEEN                     SRI LANKA       ANDINDIA.    THE...
PRODUCTION OF      PAY PHONES, MINI PILLAR, CT BOX, DP BOX, LINE JACK UNIT, TOWERS          ANDSS DROP      WIRE ,   OFC A...
THAT THE MAIN OBJECTIVES OF THE NEW             TELECOM POLICY 1999 (SALIENT        POINTS INDICATEDBELOW ) ARE ACHIEVED :...
IMMEDIATELY FOR PROVIDING RELIEF TO THOSE AFFECTED IN THE COASTAL AREAS .            COMMUNICATIONNETWORKS AT THE      COA...
CHAIRMAN AND MANAGING DIRECTOR1.4 THE NORMS SET FOR DISCHARGE OF FUNCTIONSTHE COMPANY         HAS WELL DEFINED PROCEDURES ...
THE COMPANY             MAINTAINS     VARIOUS         STATUTORY       DOCUMENTS,         REGISTERS ,   BOOKS ,          LI...
THE   MEETINGS OF THE            BOARD     OF   DIRECTORS      AND       COMMITTEES      OF THE      BOARD       ARE NOTAC...
TELECOMMUNICATIONS       HAVE ALREADY BEEN PERMANENTLY ABSORBED IN THE SERVICES OF THECOMPANY. OFFICERS       OF VARIOUS  ...
Category of person                  REBATE/CONCESSION                                    I)    REGISTRATION      OF ONE TE...
III )   NO   INSTALLATION CHARGES .awardees conferred such award                                                  IV )    ...
1.BSNL: A F         INANCIAL    OVERVIEW          2.1:-FINANCIAL ANALYSIS        OF   BSNL       2.2:-INCOME, EXPENDITURE ...
2.1     Financial Analysis of BSNL:-ON OCTOBER 1ST, 2000, BSNL              WAS FORMED BY CONVERTING SERVICE PROVIDING FUN...
3       2008                   25892                     25078                    8136                    14444       2009...
BSNL’S     EXPENSES ON STAFF HAVE SHOT- UP BY                218.75%       IN THE LAST FOUR YEARS FROM           RS3,848 C...
2.3 ACCOUNTING POLICIES                                                       (SCHEDULE T)2.3 .1 BASIS OF PREPARATION OF F...
B)   INSTALLATION CHARGES      RECOVERED FROM SUBSCRIBERS AT THE TIME OF NEW TELEPHONECONNECTIONS ARE RECOGNIZED AS INCOME...
G)    THE   CLAIMS ON ACCOUNT OF REIMBURSEMENT FOR PROVISION OF INFRASTRUCTURE , OPERATIONANDMAINTENANCE OF     VILLAGE PU...
CONSTRUCTION        OR    CREATION OF THE ASSETS .3.2 :-EXPENDITURE         ON REPLACEMENT OF ASSETS , EQUIPMENTS , INSTRU...
ASSETS COSTING UP -TO RS. 5,000                ARE DEPRECIATED FULLY IN THE YEAR OF PURCHASE .SIMILARLY,   PARTITION WORKS...
2.3      .8 FOREIGN CURRENCY TRANSACTIONS(I) TRANSACTIONS      IN FOREIGN CURRENCY ARE RECORDED AT THE EXCHANGE RATE PREVA...
PLAN AT A      PREDETERMINED RATE OF EMPLOYEE ’S BASIC SALARY AND DEARNESS ALLOWANCE .THESE   CONTRIBUTIONS TO       PROVI...
2.3      12. PRIOR PERIOD ITEMSITEMS   OF INCOME /EXPENDITURE EXCEEDING   R S. 5   LAKH ARE ONLY CONSIDERED FOR BEINGTREAT...
2.3     16. EARNING PER SHAREEARNINGS PER SHARE (“EPS”) COMPRISE THE NET PROFIT                             AFTER TAX(EXCL...
4.2.    ADMINISTRATION   AND   CONTROL4.4.    ENTRY   OF   PRIVATE SECTOR4.5.    REGULATORY     CONTROL4.6.    TELECOM POL...
4.13.     CONTRIBUTION       OF THE PRIVATE AND PUBLIC SECTORS IN TELECOM NETWORK4.14.     WIRELESS     IN LOCAL LOOP   (M...
TELECOMMUNICATIONS (DOT)         ARE RESPONSIBLE FOR POLICY FORMULATION, LICENSING , WIRELESSSPECTRUM MANAGEMENT , ADMINIS...
4.5.     REGULATORY        CONTROLENTRY    OF PRIVATE SERVICE PROVIDERS BROUGHT WITH IT THE INEVITABLE NEED FOR INDEPENDEN...
UNIVERSAL SERVICE AND QUALITATIVE IMPROVEMENT IN TELECOM SERVICES AND ALSO, OPENING OFPRIVATE SECTOR PARTICIPATION IN BASI...
TELECOM OPERATIONS (DTO)           WAS CREATED.   DTS    AND   DTO   WERE FINALLY CORPORATIZEDINTO A WHOLLY OWNED     GOVE...
OVER INTERNET PROTOCOL (VOIP)            TELEPHONY SERVICES THROUGHOUT I NDIA WITH USE OFRELEVANT TECHNOLOGIES LIKE       ...
GOVERNMENT HAS DISINVESTED ITS MAJOR SHAREHOLDING IN HTLDURING OCTOBER 2001 AND IN VSNL DURING FEBRUARY 2002 ANDSINCE THEN...
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  1. 1. A PROJECT STUDY REPORT ON BSNL, “Financial Overview of Telecom Sector in India” Submitted in partial fulfillment for the Award of degree of Master of Business AdministrationSubmitted By; Submitted To;Vishnu Kumar Sharma Ms.Ruchi KhandelwalMBA – III Sem , 2009-2011 DEEPSHIKHA INSTITUTE OF MANAGEMENT STUDIES ISI-17 RIICO INSTITUTIONAL AREA, SITAPURA JAIPUR PREFACE 1
  2. 2. As the part of my MBA curriculum I was required to undergo summer training in abusiness organization for eight or six weeks. I approached BHARAT SANCHARNIGAM LIMITTED for this purpose and got an opportunity to get training from TeamLeader who readily agreed to extend his cooperation.The project was assigned to me by the organization. The topic of my project was“Financial Overview of telecom Sector in India”. In this record I have put my bestefforts to compile the data to the highest level of accuracy and give my views to thebest of my judgment. 2
  3. 3. ACKNOWLEDGEMENTI express my sincere thanks to my project guide, Mrs. Rekha Tambi (Sr. Executive-HR & ES) for guiding me right form the inception till the successful completion of theproject. I sincerely acknowledge her for extending their valuable guidance, supportfor literature, critical reviews of project and the report and above all the moralsupport She had provided to me with all stage of this project.Vishnu kumar Sharma,MBA – III Sem. 3
  4. 4. EXECUTIVE SUMMARYThe project is an extensive report on how the BSNL companymarkets its strategies and how the company has been able intackling the present tough competition and how it is cooping up bythe allegations of the quality of its products. The report begins withthe history of the products and the introduction of the BSNLcompany.This report also contains the basic marketing strategies that areused by the BSNL company of manufacturing process, technology,production policy, advertising, collaboration, export scenario, futureprospect and government policies. The report includes some of thekey salient features of market trend issues.In today’s world of cut throat fierce competition, it is very essentialto not only exist but also to excel in the market. Today’s market isenormously more complex. Hence forth, to survive in the market, thecompany not only needs to maximize its profit but also needs tosatisfy its customers and should try to build upon there. 4
  5. 5. ContentsS.no. Particulars Pages1. Introduction2. Financial Overview4. Telecom profile5. Indian Telecom Sector6. Research Objective7. Research Methodology8. A Comprative Swot Analysis9. Reactivation Of Dormant Retailers Findings10. Suggestions11. Annexure12. Bibliography 5
  6. 6. Company Proflie 6
  7. 7. IntroductionType Communication Service ProviderAvailability Countrywide except Delhi & MumbaiOwner The Government of IndiaKey people S.D. Saxena (CFO); A.K. Sinha (CEO)Founded 19th century, incorporated 2000Website www.bsnl.in1.1 Overview of the BSNL: BSNL is Indias oldest and largest Communication Service Provider (CSP).Currently BSNL has a customer base of 64.8 million (Basic & Mobiletelephony). It has footprints throughout India except for the metropolitan citiesof Mumbai and New Delhi which are managed by MTNL. As on March 31, 2010BSNL commanded a customer base of 33.7 million Wireline, 3.6 million CDMA-WLL and 27.5 million GSM Mobile subscribers. BSNLs earnings for theFinancial Year ending March 31, 2010 stood at INR 401.8b (US$ 9.09 b) withnet profit of INR 89.4b (US$ 2.02 billion). Today, BSNL is Indias largest Telcoand one of the largest Public Sector Undertaking of the country with authorizedshare capital of US$ 3.95 billion (INR 17,500 Crores) and networth of US$14.32 billion. 7
  8. 8. 1.2Objective of Study: The main objective of this study is to carry on brief study on “Financial Overview Of Telecom Sector in India” through this I am able to get the difference of various assets and liabilities of the BSNL. Other objectives of this project are as follows: • To identify the various assets amount of the BSNL with respect to An- nual Repots of the BSNL. • Comparative study of Two year Annual reports. • To study the various departments for the needs of assets and use-less assets amount of BSNL Jaipur city center.1.3Profile of Organisation:Over views of OrganisationHistoryThe foundation of Telecom Network in India was laid by the British sometime in19th century. The history of BSNL is linked with the beginning of Telecom inIndia. In 19th century and for almost entire 20th century, the Telecom in Indiawas operated as a Government of India wing. Earlier it was part of erstwhilePost & Telegraph Department (P&T). In 1975 the Department of Telecom (DoT)was separated from P&T. DoT was responsible for running of Telecom servicesin entire country until 1985 when Mahanagar Telephone Nigam Limited (MTNL)was carved out of DoT to run the telecom services of Delhi and Mumbai. It is awell known fact that BSNL was carved out of Department of Telecom to providelevel playing field to private telecoms.Subsequently in 1990s the telecom sector 8
  9. 9. was opened up by the Government for Private investment, therefore it becamenecessary to separate the Governments policy wing from Operations wing. TheGovernment of India corporatised the operations wing of DoT on October 01,2000 and named it as Bharat Sanchar Nigam Limited (BSNL).BSNL operates asa public sector.Main Services being provided by BSNLBSNL provides almost every telecom service, however following are the mainTelecom Services being provided by BSNL in India:- 1. Universal Telecom Sevices : Fixed wireline services & Wireless in Local loop (WLL) using CDMA Technology called bfone and Tarang respectively. BSNL is dominant operator in fixed line. As on March 31, 2010 (end of financial year) BSNL had 76% share of fixed and WLL phones. BSNL Mobile Pre-paid Mobile 2. Cellular Mobile Telephone Services: BSNL is major provider of Cellular Mobile Telephone services using GSM platform under brandname Cellone. Pre-paid Cellular services of BSNL are know as Excel. As on March 31, 2010 BSNL had 17% share of mobile telephony in the country. 9
  10. 10. BSNL Broadband 3. Internet: BSNL is providing internet as dial-up connection (Sancharnet) and ADSL-Broadband Dataone. BSNL has around 50% marketshare in broadband in India. BSNL has planned aggressive rollout in broadband for current financial year. 4. Intelligent Network (IN): BSNL is providing IN services like tele-voting, toll free calling, premium calling etc.BSNL Present & FutureSince its corporatisation in October 2000, BSNL has been actively providingconnections in both Urban and Rural areas and the efficiency of the companyhas drastically improved from the days when one had to wait for years to get aphone connection to now when one can get a connection in even hours. Pre-activated Mobile connections are available at many places across India. BSNLhas also unveiled very cost-effective Broadband internet access plans(DataOne) targeted at homes and small businesses. At present BSNL enjoys47% of market share of ISP services. Year of Broadband 2007 10
  11. 11. Former Indian Communications Minister Thiru Dayanidhi Maran had declaredyear 2010 as "Year of Broadband" in India and BSNL is gearing up to provide 5million Broadband connectivity by the end of 2010. BSNL has upgraded existingDataone (Broadband) connections for a speed of up to 2 Mbit/s without anyextra cost. This 2 Mbit/s broadband service is being provided by BSNL at a costof just US$ 5.5 per month. Further, BSNL is planning to upgrade its broadbandservices to Triple play (telecommunications) in 2010.BSNL has been asked to add 108 million customers by 2010 by Former IndianCommunications Minister Thiru Dayanidhi Maran. With the frantic activity in thecommunication sector in India, the target appears achievable, however due tointense competition in Indian Telecom sector in recent past BSNLs growth hasslowed down.BSNL is pioneer of Rural Telephony in India. BSNL has recently bagged 80% ofUS$ 580 m (INR 2,500 crores) Rural Telephony project of Government of India.ChallengesDuring Financial Year 2009-2010 (From April 01, 2009 to March 31,2010 )BSNL has added 9.6 million new customers in various telephone servicestaking its customer base to 64.8 million. BSNLs nearest competitor Bharti Airtelis standing at a customer base of 39 million. However, despite impressivegrowth shown by BSNL in recent times, the Fixed line customer base of BSNLis declining. In order to woo back its fixed-line customers BSNL has broughtdown long distance calling rate under OneIndia plan, however, the success ofthe scheme is not known. However, BSNL faces bleak fiscal 2009-2010 asusers flee, which has been accepted by the CMD BSNL.Presently there is an intense competition in Indian Telecom sector and variousTelcos are rolling out attractive schemes and are providing good customerservices. However, BSNL being legacy operator and its conversion from aGovernment Department, earns lot of criticism for its poor customer service. 11
  12. 12. Although in recent past there have been tremendous improvement in working ofBSNL but still it is much below the Industrys Expectations. A large aging(average age 49 years(appx)) workforce (300,000 strong), which is mostlysemi-illetrate or illeterate is the main reason for the poor customer service.Further, the Top management of BSNL is still working in BSNL on deputationbasis holding Government employee status thus having little commitment to theorganisation. Although in coming years the retirement profile of the workforce isvery fast and around 25% of existing workforce will retire by 2010, however, stillthe workforce will be quite large by the industry standards. Quality of theworkforce will also remain an issue.BSNL at Jaipur Circle BSNL Jaipur Circle office is situated in City Center area. This office isundertaking of office. This office are works various areas like Marketing,Planning, Administrative, Operation & Management and Finance. Eachdepartment works under GM telecom district. GM delegates our some duties to DGM. DGM is the head of thedepartment. These posts are highly responsible because DGM is the mainperson of the department and DGM gives various approvals of works. Thisapproval leaves various effect of the department like financial, workingefficiency, functions of departments and field officer works. Basically BSNL city center works in departmental approaches orfunctions. This office provides a support to other departments or employees ofBSNL. In this office calculated various function of employees like salary ofemployees, departmental information, various tenders, payment of vendors,departmental expenditure of general provident funds etc. But this office run a collection center this collection center collect varioustelephones/mobiles/broadband bills. 12
  13. 13. VISION TO BECOME THE LARGEST TELECOM SERVICE PROVIDER IN SOUTH EAST ASIA. MISSION To provide world class State-of-art technology telecom services on demand at affordable price. To Provide world class telecom infrastructure to develop countrys economy.Objects To be the Lead Telecom Services Provider. To provide quality and reliable fixed telecom service to our customer and thereby increase customers confidence. To provide mobile telephone service of high quality and become no. 1 GSM operator in its area of operation. 13
  14. 14. To provide point of interconnection to other service provider as per their requirement promptly. To facilitate R & D activity in the country. Contribute towards: National Plan Target of 500 million subscriber base for India by 2012. Broadband customers base of 20 million in India by 2010 as per Broadband.Implementation of Triple play as a regular commercial proposition The Company Bharat Sanchar Nigam Limited (known as BSNL) is a public sectorcommunications company in India. It is the largest telecommunication companyin India and the sixth largest in the world. Its headquarters are at StatesmanHouse, Barakhamba Road, New Delhi. It has the status of Mini-ratana - a statusassigned to reputed Public Sector companies in India. During the current financial year, the management based on physical verificationof fixed assets and inventory and reconciliation of various heads of assets andliabilities in the subsidiary and general ledgers which has resulted intoincrease/decrease in the following assets and liabilities taken over as on 01stOctober 2000 amounting to net reduction in the assets of Rs. 5,910 lakh (P.Y. - Rs.25,452 lakh): 14
  15. 15. In pursuance of the Memorandum of Understanding dated 30th September2000 executed between Government of India and BSNL, all assets and liabilities inrespect of business carried on by DTS and DTO were transferred to the Companywith effect from 01st October 2000 at a provisional value of Rs. 6,300,000 lakh andup to previous financial year BSNL has identified net assets of Rs. 6,352,028 lakhagainst it. General Information No. of Revenue District 2 Population 1,629,881 No. of Tehsil 6 Block H.Q. 7 Total Villages 1221 No. of Villages(Inhabited) 1108Revenues Strategies The telecom sector is the most competitive sector post liberalization. This hasresulted in a movement from growth based business model that emphasized growthin numbers to profit-based model where the success is measured by margins. BSNLas part of the transition has to adopt both cost reduction and revenue enhancementmeasures, which would directly impact profitability. It is evident that there is a declining trend in basic services and there isstagnation in cellular revenues. Revenue maximization strategies will have twocomponents, one internal to the organization and the other external. The internalaspect would involve an initiative for change of process, technology, organizationalstructure etc. In this context, revenue assurance is the key to improving the bottomline for BSNL. This is proactive strategy to capture all revenues due for the servicesprovided. Presently, BSNL generates bills through different softwares across the 15
  16. 16. zones of operation, which are disintegrated and provide only basic solutions. Theindustry standard for revenue leakage is about 3 to 7% percent of revenue, which inmoney terms translates to about Rs.2100 crores for BSNL. Therefore pluggingrevenue leakages is just the first and most obvious part of a Revenue Assuranceinitiative. The key concerns for BSNL for effective revenue realization are –  The delay in customer billing after activation  Time lag between calls generated and billed  Scope of fraud  Non-availability of uniform database. Therefore the focus should be on immediate implementation of CDR basedbilling. This would require huge investment but the return would more thancommensurate. The software should be scalable and be able to incorporate all thenext generation value added services. The implementation of CDR based systemwill also generate the following benefits:  Plugging of leakage of revenue.  Formulation of appropriate marketing strategies – 16
  17. 17. Management Profile Chief General Manager (CGM) Mr. Hinduja GM Telecom District Mr. Prashant TrivediDeputy General Manager DGM DGM (DGM) (Operation & (Finance) (Marketing, Planning & Management) Mr. S. D. Tyagi Chief Accounting Officer TR CO Strategic Business PlansAccount officer TR AO Mob. AO Telecom 1st Mr. Manoj Yadav Revenue 2ndMr. S.S. Bahdoriya Mr. SC Jain AO SBP AO Pay AO Cash AO Pay Mr. Naagar Mr. Ram Sadal Mr. Ram Mr. Naagar Avatar Jr. Account Officer Mr. R.S. Yogik Section Supervisor Sr. Trunk Peon Mr. Chandrshekhar Supervisor Mr. Gyasi Ram Mr. K.N. Duwedi Organisation Functional Structure of BSNL Jaipur Circle SBP Department 17
  18. 18. Products • BSNL LANDLINE  PHONE PLUS SERVICE  NEW TELEPHONE CONNECTION  PERMANENT CONNECTION  CONCESSION IN RENTALS  SHIFT OF TELEPHONE • BSNL MOBILE  POSTPAID  PREPAID  UNIFIED MESSAGING  GPRS/WAP/MMS  DEMOs  TARIFF  SMS & BULK SMS • BSNL WLL • INTERNET SERVICES  NETWORK  BROADBAND  TYPES OF ACCESS  WI-FI  CO-LOCATION SERVICE  BSNL WEB HOSTING  INTERNET TARIFF  DIAL UP INTERNET  SMS& BULK SMS • BSNL BROADBAND  REGISTER ONLINE  TARIFF 18
  19. 19.  USO FUNDED RURAL BROADBAND  FAQ  CHECK USAGE• BSNL MANAGED NETWORK SERVICES• BSNL MPLS-VPN• ISDN• INTELLIGENT NETWORK  FREE PHONE SERVICE  PREMIUM RATE SERVICE  INDIA TELEPHONE CARD  VIRTUAL PRIVATE NETWORK (VPN)  VOICE VPN  UNIVERSAL NUMBER  UNIVERSAL PERSONAL NUMBER  TELE VOTING• VIDEO CONFERENCING  OVERVIEW  TARIFF  FAQ• AUDIO CONFERENCING  OVERVIEW  TARIFF  FAQ• I NET  OVERVIEW  SERVICES ON I NET  USING ON I NET  I NET CONNECTIONS  TARIFF• TELEX/ TELEGRAPH  TELEX/ TELEGRAPH 19
  20. 20.  TARIFF• EPABX  EPABX  FREE EPABX  TARIFF  CENTREX  CENTREX TARIFF 20
  21. 21. Profile of company top ManagementDirector (Operations) - Shri Rajesh WadhwaShri Kuldeep Goyal has taken over as Chairman & Managing Director of BSNL onAugust 1, 2007. Shri Kuldeep Goyal joined the Indian Telecommunication Service ofGovt. of India in 1972. He is an Engineering Graduate from IIT Roorkee.Just prior to taking over as CMD, BSNL, Shri Goyal has worked as Director(Planning & New Services) and was responsible for planning and execution ofstrategy for expansion of BSNLs network.With more than 35 years of service, Shri Goyal has vast experience in telecomsector viz. planning, installation, operation and maintenance of wirelines andwireless services, data services, computerization of various activities in telecomnetwork and provision of value added services.While working as chief General Manager, Maharashtra Telecom circle, he was incharge for operations, planning and expansion of telecom network of the largestcircle of BSNL and contributed to rapid growth of telecom networks in Maharashtraand Goa. During his short tenure of ten months as Executive Director, MTNLMumbai, he was able to double the connections in GSM network of MTNL Mumbaiand MTNLs market share was enhanced from 8.93% to 15.5%. During his tenure,broadband service was also started in January 2005 and 40000 subscribers wereenrolled during a short period of nine months. Shri Goyal has worked in Yemen on aforeign project through Telecommunications Consultants India Ltd. He was also aMember of National Working Group of ITU-T Study Group 2 on operational aspectof service, 21
  22. 22. PROVISION AND PERFORMANCE OF TELECOM NETWORKS AND PARTICIPATED IN MEETING OF ITU-TSTUDY GROUP 2 AT GENEVA. SHRI GOYAL HAS DELIVERED A NUMBER OF TALKS ON VARIOUSTOPICS RELATING TO TELECOM IN VARIOUS FORUMS LIKE GSM ASSOCIATION, INSTITUTE OFENGINEERS, INSTITUTE OF ELECTRICAL AND TELECOMMUNICATIONS ENGINEERS, CII, DOORDARSHAN AND A.I.R. SOME OF HIS ARTICLES - "TELECOMMUNICATION INDUSTRY AT A GLANCE","UNIVERSAL ACCESS - AN INTERNATIONAL PERSPECTIVE " AND "TRADE IN TELECOMMUNICATIONS"HAVE BEEN PUBLISHED IN TELECOMMUNICATIONS JOURNAL.DIRECTOR (FINANCE)- SHRI S.D.SAXENASHRI S.D.SAXENA WAS APPOINTED DIRECTOR (FINANCE), BSNL ON OFFICIATING BASIS INAPRIL 2002 AND HAS BEEN WORKING AS DIRECTOR (FINANCE) ON REGULAR BASIS SINCE29.10.2003. SHRI SAXENA HOLDS AN EXCELLENT ACADEMIC RECORD . HE IS M.SC. (PHYSICS)AND MBA (FINANCIAL MANAGEMENT). WINNER OF MANY AWARDS AND MEDALS, HE WASAWARDED CHANCELLORS GOLD MEDAL FOR BEING THE MOST OUTSTANDING STUDENT IN THEAGRA UNIVERSITY IN THE YEAR 1967. PRIOR TO JOINING THE GOVERNMENT OF INDIA THROUGHTHE IAS, ETC. EXAMINATION OF 1972 HE WAS A LECTURER IN PHYSICS AT THE UNIVERSITY OFRAJASTHAN AT JAIPUR AND TAUGHT FOR SIX YEARS . DURING THIS PERIOD HE WAS ASSOCIATEDWITH VARIOUS ORGANIZATIONS INCLUDING TATA INSTITUTE OF FUNDAMENTAL RESEARCH(TIFR) AND ATOMIC ENERGY. AMONG THE NOTABLE ASSIGNMENTS OF SHRI S.D. SAXENA,SPECIAL MENTION CAN BE MADE OF C-DOT WHERE HE WAS INVOLVED IN SETTING UP OF C-DOTWITH SHRI SAM PITRODA AND PADMSHRI G.B. MEEMAMSI. HE WAS ALSO DIRECTOR (F) IN THEE-10 B PROJECT FOR INDUCTION OF ELECTRONIC SWITCHING SYSTEM IN INDIAN TELECOMNETWORK.HE WAS IFA OF MAHANAGAR TELEPHONE NIGAM LTD. FOR 7 YEARS AND WAS ACTIVELYINVOLVED IN THE GDR ISSUE, RATED AS ONE OF THE BEST GDRS BROUGHT OUT BY AN I NDIAN 22
  23. 23. CORPORATE INCLUDING PRIVATE COMPANIES . HE WAS A MEMBER OF RAKESH MOHANINFRASTRUCTURE COMMITTEE WHICH MADE SIGNIFICANT RECOMMENDATIONS FOR THE GROWTHAND DEVELOPMENT OF INDIAN INFRASTRUCTURE SECTOR . SHRI SAXENA HAS BEEN AN ACTINGMEMBER OF THE STUDY GROUP III UNDER THE AEGIS OF INTERNATIONAL TELECOMMUNICATIONUNION. HE WAS THE CHAIRMAN OF THE SPECIAL RAPPORTEUR GROUP OF STUDY GROUP IIIFOR TELECOMMUNICATION STATISTICS WHICH MADE SIGNIFICANT CONTRIBUTIONS FOR THEPRESENTATION OF TELECOM STATISTICS ON A GLOBAL SCALE .SHRI SAXENA WAS ELECTED CHAIRMAN OF THE TARIFF GROUP FOR ASIA AND OCEANIA(TAS) GROUP IN THE WORLD TELECOM STANDARDIZATION ASSEMBLY OF ITU HELD INFLORIANOPOLIS, BRAZIL.HE HAS SPECIALISED IN TECHNO-ECONOMIES AND FINANCIAL MANAGEMENT OF TELECOMCOMPANIES WITH EMPHASIS ON TARIFF AND TARIFF BASED MARKETING .DIRECTOR (PLANNING & NEW SERVICES)-SHRI R.K.AGGARWALSHRI RAKESH KUMAR AGARWAL HAS DONE HIS B.E. FROM INDIAN INSTITUTE OF SCIENCE,BANGALORE IN 1973 AND THEN M.TECH IN COMMUNICATIONS FROM IIT DELHI IN 1975.THEREAFTER HE JOINED DEPARTMENT OF TELECOMMUNICATIONS AND WORKED IN VARIOUS FIELDSOF TELECOMMUNICATIONS . HE DID INSTALLATION OF C-400 CROSS BAR EXCHANGES TILL1983. HE WAS SENT TO FRANCE FOR TRAINING FOR THE INSTALLATION OF DIGITAL ELECTRONICEXCHANGE OF E-10B MAKE IN 1983 AND THEREAFTER WORKED AS DEPUTY GENERALMANAGER (INSTALLATION) FOR E-10B EXCHANGES IN MTNL, MUMBAI FROM 1983 TILL1991.HE WAS DOT REPRESENTATIVE FOR THE SYSTEM SELECTION COMMITTEE SET UP TO FINALIZEGATEWAY SWITCHES FOR VSNL. DURING 1990 HE REPRESENTED I NDIA FOR APT 23
  24. 24. CONFERENCE IN I NDONESIA . HE WAS ALSO DEPUTED AS PROJECT DIRECTOR, TCIL TOSULTANATE-OF-OMAN FROM 1991 TO 1996 WHERE HE HANDLED ALL THE PROJECTS RELATEDTO SETTING UP THE EXTERNAL PLANT NETWORK FOR COPPER CABLE AND OPTICAL FIBERNETWORK IN SULTANATE-OF-OMAN. FROM 1996-98 HE WORKED AS CHIEF GENERALMANAGER, ANDAMAN & NICOBAR TELECOM CIRCLE AND THEREAFTER HANDLED THE CHARGE OFJAIPUR TELECOM DISTRICT, RAJASTHAN FROM 1998-99. HE WAS POSTED AS GENERALMANAGER (DEVELOPMENT) IN PUNE IN 1999 AND WAS IN CHARGE OF COMPLETE PLANNING ANDINSTALLATION OF ALL SWITCHING AND TRANSMISSION NETWORK IN PUNE DISTRICT. HE WAS ALSOIN -CHARGE OF COMPUTERIZATION AS WELL AS INTRODUCTION OF NEW SERVICES IN THE NETWORKIN PUNE.HE WAS CLOSELY INVOLVED WITH PLANNING , EVALUATION OF TENDER AS WELL AS IMPLEMENTATIONAND MAINTENANCE OF GSM MOBILE SERVICES IN MAHARASHTRA SINCE 2002. AS CHAIRMAN OFTHE VALIDATION COMMITTEE HE SUCCESSFULLY CARRIED OUT THE VALIDATION OF MOBILE SWITCHFOR WEST ZONE INSTALLED AT PUNE. HE WAS IN- CHARGE OF ALL THE CENTRAL PLATFORMS FORGSM MOBILE SERVICES FOR WEST ZONE INSTALLED AT PUNE NAMELY PRE -PAID PLATFORM ,BILLING SYSTEM AND VALUE ADDED SERVICES FOR MOBILE . LATER ON THE FINALIZED EXPANSION OFMOBILE NETWORK IN WEST ZONE FOR 4 MILLION LINES AND WAS INVOLVED IN THE COMMISSIONINGAND MAINTENANCE OF GSM MOBILE NETWORK. HE WAS ALSO CLOSELY INVOLVED WITH THESETTING UP OF CALL CENTRE AT PUNE FOR HANDLING CUSTOMER CARE AND MARKETING OFMOBILE SERVICES TILL MAY, 2006.IN JUNE, 2006, HE WAS POSTED AS CHIEF GENERALMANAGER, BSNL BIHAR TELECOM CIRCLE. HE HAS TAKEN OVER THE CHARGE OF DIRECTOR(PLANNING & NEW SERVICES) IN BSNL BOARD W.E.F. 11TH APRIL, 2008PROFILE OF THE COMPANY’S BUSINESS1. BASIC AND LIMITED MOBILE TELEPHONE SERVICESBSNL IS THE LEADING SERVICE PROVIDER IN THE COUNTRY IN THE BASIC TELEPHONE SERVICES.AS OF NOW MORE THAN 35 MILLION DIRECT EXCHANGE LINES & MORE THAN 2.2.MILLIONTELEPHONES IN THE LIMITED MOBILE TELEPHONE SERVICES ARE EXISTING . BSNL HAS PROVIDES A 24
  25. 25. NUMBER OF ATTRACTIVE TARIFF PACKAGES & PLANS WHICH SHALL FURTHER STRENGTHEN ITSSUBSCRIBER BASE .2. CELLULAR MOBILE TELEPHONE SERVICESBSNL’s GSM Technology based Cellular Mobile Network has reached a long way,covering more than 6400 towns, with a subscriber base of over 1.54 crore as on31st Jan. 2009 out of which 1.16 Crore cellular telephones are in the prepaidsegment.3. INTERNET SERVICESBSNL offers Dialup Internet services to the customers by Post-paid service with thebrand name ‘Net one’, and pre-paid service with the brand name ‘Sancharnet’. Thepost-paid service is a CLI based access service, currently operational in 100 cities.Sancharnet is available on local call basis throughout India to ISDN and PSTNsubscribers. The Internet Dhaba scheme of the Company aims to further promoteInternet usage in rural and semi urban areas.To keep pace with the latest and varied value added services to its customers,BSNL uses IP/MPLS based core to offer world class IP VPN services. MPLS basedVPNs is a very useful service for Corporate, as it reduces the cost involved as wellas the complexity in setting up VPNs for customers networking. As on 31.03.2005,your Company’s total Internet customer base was 17, 98,089 and total InternetDhabas were 4143. A total of 708594 dial up Internet connections have been givenduring 2007-2008, against a target of 7 lakhs. BSNL plans to give 1215980 moredial up connections during the year 2008-09. As on 31.1.2009, there were 2367404internet subscribers working in BSNL net work. 25
  26. 26. 4. Intelligent NetworkIntelligent Network Services is a service that incorporates several value addedfacilities, thoroughly designed to save time and money, and enhance productivity. Atpresent, your company offers Free Phone (FPH), Premium Rate Service (PRM),India Telephone Card (ITC), Account Card Calling (ACC), Virtual Private Network(VPN), Universal Access Number (UAN) and Tele voting IN services. With thecommissioning of five numbers of new technology IN Platforms (Four Generalpurpose and One Mass Calling) at Kolkata, Bangalore, Ahmadabad and Hyderabad,the India Telephone Card facility and new value added services are being providedthroughout the country. Activation of these new IN platforms had increased the saleof ITC Cards taking the figure to Rs.265 crores in 2007-08 alone.5. BROADBAND SERVICESBSNL has launched its Broadband Services under the brand NAME ‘DATA One’ on14/1/2005. This offers services like High Speed Internet Access with speed rangingfrom 256 Kbps to 8 Mbps. Other services like streaming video, Video on Demand,Bandwidth on demand etc., have also been planned. As on 31.12.2005, there weremore than 356000 broad band connection provided by the BSNL. There are plans togive 2 million and 3 million connections in 2008 and 2009 respectively.DEVELOPMENT OF RURAL TELECOM NETWORK1. Rural DELsAS ON 31.03.2008, IN BSNL’S NETWORK , A TOTAL OF 1.356 CRORE RURAL TELEPHONECONNECTIONS WERE WORKING . AS ON 31.1.2009, THERE ARE 1.425 CRORE RURAL TELEPHONESWORKING IN BSNL NETWORK . 26
  27. 27. 2. (a) VILLAGE Public Telephones (VPTs) & RCPs:-BSNL, in its unstinted efforts to make the slogan ‘Connecting India’, a reality, hadprovided VPTs in 5, 18,992 villages up to 31.03.2008. The Company entered into anagreement with USO Fund for expansion of rural telecom network by November2009, by providing VPTs in 66,822 undisputed, undisturbed, accessible andinhabited villages having population more than 100 as per Census, 1991 in thecountry. BSNL PROVIDED VPTs in 5, 28,886 villages up to 31.01.2008. There areplans to replace all MARR VPTs in the COUNTRY. As of now total 123194 MARRVPTs already replaced in the country by BSNL. BSNL also committed to provide theRural Community Phones as per the USO Fund agreement. As of now around13713 RCPs already provided by BSNL. (b) Public Telephones:-There are more than 2 million PCOs working in the BSNL Network out of whicharound 1 million PCOs are having STD/ISD.C. NETWORK MANAGEMENTBSNL is committed to provide a robust state of the art infrastructure that will providestable and superior services to its customers. Accordingly, the MLLN networkcovering more than 200 cities was made operational in May 2004. Since then, about22000 circuits have been provided on this network. This has provided high level ofstability to the leased circuits and capability to offer N X 64 Kbps circuits. Keeping inview the growing demand of leased circuits, the network is being expanded to coverabout 50 more locations and additional capacity at many existing locations is alsobeing provided. 27
  28. 28. To improve the operational efficiency of CCS 7 signaling, stand-alone signalingtransfer point (SSTP) equipment is being procured. This will also enable theCompany to measure signaling traffic of other operators, who are using its signalingnetwork for exchanging messages, especially with regard to cellular services. BSNLhas more than 4.7 Lakhs Route Kilometers of optical fiber network in the country &has installed capacity more than 6.4 million lines for the TAX meant for the STD/ISDnetwork.D. Setting up KU Band VSAT networkAs regards the KU Band VSAT network equipment, the hub of this network is beingset up at BANGALORE; The equipment has been installed and expected to becommissioned shortly. This will help your Company, to become a service providerwith all types of media equipment i.e. OFC, Microwave and satellite for provision ofbandwidth, this will also enable the Company to offer composite solutions to itscustomers.E. Policy on transmission network maintenanceTELECOM CIRCLES HAVE LARGE TRANSMISSION NETWORKS. TO IMPROVE THE MAINTENANCE OFTRANSMISSION NETWORK , GUIDELINES FOR ROUTE PARTIES AND VEHICLES HAVE BEEN FORMALIZED.TELECOM TERRITORIAL CIRCLES ARE ALSO BEING CONNECTED WITH COMPUTERIZED NETWORK FORBOOKING OF TRANSMISSION SYSTEM FAULTS , WITH A VIEW TO IMPROVE FOLLOW UP AND FASTERRESTORATION OF FAULTS .F. Annual Maintenance contracts for switching system & WLL 28
  29. 29. COMPREHENSIVE AMC, WHICH INCLUDES HARDWARE AND SOFTWARE MAINTENANCE AND UPGRADE ,HAS BEEN ARRANGED WITH THE RESPECTIVE EQUIPMENT SUPPLIERS . INITIAL FEEDBACK SUGGESTSTHAT , AS A RESULT OF PREVENTIVE AND CORRECTIVE MAINTENANCE SUPPORT , THE PERFORMANCE OFSWITCHES IS IMPROVING . DIFFICULTIES IN ENTERING INTO AMC WITH RURAL WLL EQUIPMENTSSUPPLIERS HAVE BEEN RESOLVED AND PROCEDURES STREAMLINED SO THAT ADEQUATE MAINTENANCESUPPORT BECOMES AVAILABLE . AS A RESULT , THE PERFORMANCE OF WLL NETWORK IS IMPROVING .AMC ARRANGEMENTS HAVE ALSO BEEN MADE WITH SUPPLIERS OF FWTS AND HAND HELDTERMINALS .G. Provision of SMPS with rural WLL DELsWITH A VIEW TO INCREASE THE TALK TIME AND TO TAKE CARE OF POOR POWER SUPPLY CONDITIONSIN RURAL AREAS , STEPS ARE TAKEN FOR PROCUREMENT OF SWITCH MODE POWER SUPPLY (SMPS)WITH 7 AHBATTERY . ALL NEW PROCUREMENTS OF WLL EQUIPMENT WILL NOW HAVE PROVISIONS FOR SMPSWITH 7 AH BATTERY TO BE SUPPLIED ALONG WITH FWT SH. Fault Repair Services – ACHIEVEMENTS AT A GLANCE (BASIC SERVICE) S L. NO. PARAMETERS YEAR 2008-09 2009-10 ACHIEVEMENT ACHIEVEMENT 1 FAULT RATE 8.4 7.6 2 TRUNK EFFICIENCY 88.4 89.1 3 CCR i) LOCAL 57.85 59.89 ii) JUNCTION 47.88 54.18 iii) STD 40.57 43.70 4 FAULT CLEARANCE 29
  30. 30. i) SAME DAY 75.78 77.30 ii) NEXT DAY 90.29 90.20 iii) WITHIN 7 DAYS 98.23 98.70 5 REPEAT FAULTS 0.87 0.58I. COMPUTERISATIONIMPLEMENTATION OF INTER OPERATOR BILLING AND ACCOUNTING SYSTEM (IOBAS) HAS BEENCOMPLETED. YOUR COMPANY PLANS TO PROVIDE CDR BASED CUSTOMER CARE ANDCONVERGENT BILLING SYSTEM . THIS WILL HELP COMPANY IN PROVIDING EFFECTIVE AND EFFICIENTBILLING & CUSTOMER CARE SOLUTIONS FOR ITS FIXED LINE SUBSCRIBERS . IT ENVISAGES BUILDINGOF COUNTRY WIDE INTRANET TO REDUCE THE COST OF OPERATION , INCREASE REALIZATION , STOPLEAKAGE OF REVENUE AND MINIMIZE FRAUDS, BESIDES PROVIDING ROUND THE CLOCK BESTCUSTOMER CARE SERVICES TO THE COMPANY’S SUBSCRIBERS .CALL CENTER FACILITY HAS BEEN INTRODUCED FOR 71 SSAS, WHICH IS A SINGLE POINTAPPROACH FOR ADDRESSING ALL CUSTOMER NEEDS CUM GRIEVANCES . WEB BASED PUBLICGRIEVANCE MANAGEMENT SYSTEM HAS BEEN IMPLEMENTED FOR SPEEDY DISPOSAL AND MONITORINGOF PUBLIC GRIEVANCES . WEB BASED INVENTORY MANAGEMENT PACKAGE HAS ALSO BEENINTRODUCED , THROUGH WHICH; MATERIAL MANAGEMENT FUNCTIONS ARE BEING COMPUTERIZEDGRADUALLY IN DIFFERENT CIRCLES . ONLINE MOBILE BILL VIEWING FACILITY HAS BEEN MADEAVAILABLE TO ALL CELL ONE MOBILE CUSTOMERS (ALL STATES) THROUGH COMPANY’S PORTAL(HTTP:// BSNL.IN). DUPLICATE TELEPHONE BILL VIEWING FACILITY FOR LANDLINE TELEPHONE HASALSO BEEN MADE AVAILABLE AT MANY PLACES THROUGH WEBSITES OF RESPECTIVE TELECOMCIRCLES .J. BUSINESS DEVELOPMENTBSNL IS OFFERING CUSTOMIZED ENTERPRISE NETWORK SOLUTION AND SERVICES TO THECORPORATE CUSTOMERS ON TURNKEY BASIS . THE COMPANY HAS EMPANELLED SYSTEMINTEGRATORS AS BUSINESS ASSOCIATES TO IMPLEMENT THE WAN SOLUTION THROUGH LEASED 30
  31. 31. LINE / MPLS. YOUR COMPANY HAS PROVIDED BANDWIDTH FOR WAN NETWORK OF CORPORATELIKE SBI, PNB, ICICI, HPCL ETC . SOME OF THE WORKS WERE AWARDED TO BSNL AFTERCOMPETITIVE BID.BSNL HAS ALSO ENTERED INTO MOUS WITH A NUMBER OF LEADING CORPORATE SUCH ASNTPC, BPCL, UNION BANK OF INDIA (UBI), INDIAN AIRLINES (IAL), IFFCO, MCX, PNBIN THE YEAR 2008-2009 FOR PROVIDING TOTAL TELECOM SOLUTION AND FOR HAVING SYNERGY OFOPERATION WITH THESE ORGANIZATIONS .EPABX MANUFACTURERS HAVE BEEN EMPANELLED TO PROVIDE “FREE OF COST EPABXSYSTEMS” TO CORPORATE CUSTOMERS AS A BUSINESS DEVELOPMENT INITIATIVE TO RETAIN THE BIGCORPORATE SUBSCRIBERS . AN EXCLUSIVE AGREEMENT HAS BEEN SIGNED WITH RAILTEL, TOPROVIDE TELECOM SERVICE ON REVENUE SHARE BASIS BY CALL CENTRE’S, FOR CENTRALIZEDENQUIRY FOR RAILWAYS. FURTHERMORE, YOUR COMPANY HAS ENTERED INTO AN AGREEMENT FORUTILIZING PRASAR BHARTI AND RAILTEL’S TOWERS FOR INSTALLING THE GSM ANTENNAS FORFASTER ROLLOUT OF GSM NETWORK.K. INTERNATIONAL LONG DISTANCE (ILD)SUBSEQUENT TO THE SIGNING OF MOU WITH SRI LANKA TELECOM (SLT), MICROWAVE LINKBETWEEN INDIA AND SRI LANKA HAS BEEN COMMISSIONED. BSNL HAS STARTED ITS DIRECT ILDSERVICES TO SRI LANKA UTILIZING THIS MICROWAVE LINK , WHICH WAS LAUNCHED BY HON’BLEMOC AT CHENNAI ON 16TH OCTOBER 2009.INTERNATIONAL SERVICE AGREEMENTS FOR ILD TRAFFIC WITH LEADING INTERNATIONAL CARRIERSVIZ . TELEGLOBE CANADA, TELECOM ITALIA, MCI USA, SRI LANKA TELECOM, SINGTEL OPTUS,FRANCE TELECOM ETC ., HAVE BEEN SIGNED . IN THE FIRST PHASE , OUTBOUND ILD TRAFFIC ISBEING SENT THROUGH THESE CARRIERS . 31
  32. 32. BSNL HAS ALSO PLANNED TO LAY THE UNDERSEA SUBMARINE CABLE BETWEEN SRI LANKA ANDINDIA. THE LANDING STATION FOR SUBMARINE CABLE HAS BEEN IDENTIFIED AS TUTICORIN(TAMILNADU). THIS CABLE WILL PROVIDE CONNECTIVITY TO OTHER INTERNATIONAL CABLE SYSTEMFOR CARRYING VOICE & DATA TRAFFIC .BSNL IS UPGRADING ITS 4 LEVEL-I TAXS I.E., MUMBAI, CHENNAI, NEW DELHI, KOLKATA, TOINTERNATIONAL GATEWAY CAPABILITY ALONG WITH THE SETTING UP OF MONITORING FACILITY ATTHESE STATION .L. CUSTOMER CAREBSNL, WITH ITS ENDEAVOUR FOR HIGH CUSTOMER SATISFACTION , HAS BEEN PAYING GREATATTENTION IN THIS AREA , BY MEANS OF OPENING OF MORE AND MORE CUSTOMER SERVICE CENTERS .IN ITS ONGOING ENDEAVOUR TO EXPAND MODES OF BILL PAYMENT OPTIONS FOR ITS CUSTOMERS ,SEVERAL NEW ARRANGEMENTS ARE IN ADVANCED STAGE OFNEGOTIATION / FINALIZATION / IMPLEMENTATION . SOME OF THESE INCLUDE : RECHARGE OF EXCEL PRE-PAID CARDS THROUGH THE ATMS OF PNB AND SBI; BILL PAYMENT THROUGH M/S EASY BILLRETAIL OUTLETS PRESENTLY AVAILABLE AT BANGALORE, GURGAON AND NOIDA LIKELY TO BEEXPANDED TO OTHER CITIES ; PAYMENT THROUGH INTERNET /ECS USING THE SERVICES OFINTERMEDIARIES M/S BILL DESK AND M/S BILL JUNCTION RESPECTIVELY , AND , THROUGHCREDIT/ DEBIT CARDS .M. TELECOM FACTORIESTHE TELECOM FACTORIES OF BSNL LOCATED AT KOLKATA, GOPALPUR, KHARAGPUR, JABALPUR,RICHHAI, BHILAI AND MUMBAI ARE IN -HOUSE MANUFACTURING UNITS CURRENTLY ENGAGED IN 32
  33. 33. PRODUCTION OF PAY PHONES, MINI PILLAR, CT BOX, DP BOX, LINE JACK UNIT, TOWERS ANDSS DROP WIRE , OFC ACCESSORIES, FDMS ETC. DURING 2008-09,WITH A VIEW TO USE THE FACTORIES INFRASTRUCTURE AND WORKFORCE GAINFULLY , EFFORTS AREBEING MADE TO TIE UP WITH OTHER TECHNOLOGY PROVIDERS ETC .N. OBLIGATIONS1. Towards customers and dealersTO PROVIDE PROMPT , COURTEOUS AND EFFICIENT SERVICE AND QUALITY OF PRODUCTS / SERVICES ATFAIR AND REASONABLE SERVICES .2. Towards employees  DEVELOP THEIR CAPABILITY AND ADVANCEMENT THROUGH APPROPRIATE TRAINING AND CAREER PLANNING  EXPEDITIOUS REDRESSAL OF GRIEVANCES  FAIR DEALINGS WITH RECOGNIZED REPRESENTATIVES OF EMPLOYEES IN PURSUANCE OF HEALTHY TRADE UNION PRACTICES AND SOUND PERSONNEL POLICIES3. Towards the Society –Corporate Social ResponsibilitiesCORPORATE SOCIAL RESPONSIBILITIESBSNL IS COMMITTED TO PROVIDE QUALITY TELECOM SERVICES AT AFFORDABLE PRICE TO THECITIZENS OF THE REMOTEST PART OF THE COUNTRY. BSNL IS MAKING ALL EFFORT TO ENSURE 33
  34. 34. THAT THE MAIN OBJECTIVES OF THE NEW TELECOM POLICY 1999 (SALIENT POINTS INDICATEDBELOW ) ARE ACHIEVED :ACCESS TO TELECOMMUNICATIONS IS OF UTMOST IMPORTANCE FOR ACHIEVEMENT OF THECOUNTRY S SOCIAL AND ECONOMIC GOALS . AVAILABILITY OF AFFORDABLE AND EFFECTIVECOMMUNICATIONS FOR THE CITIZENS IS AT THE CORE OF THE VISION AND GOAL OF THE NEWTELECOM POLICY 1999.STRIVE TO PROVIDE A BALANCE BETWEEN THE PROVISION OF UNIVERSAL SERVICE TO ALLUNCOVERED AREAS , INCLUDING THE RURAL AREAS , AND THE PROVISION OF HIGH - LEVEL SERVICESCAPABLE OF MEETING THE NEEDS OF THE COUNTRY S ECONOMY ENCOURAGE DEVELOPMENT OFTELECOMMUNICATION FACILITIES IN REMOTE , HILLY AND TRIBAL AREAS OF THE COUNTRY ;TRANSFORM IN A TIME BOUND MANNER, THE TELECOMMUNICATIONS SECTOR TO A GREATERCOMPETITIVE ENVIRONMENT IN BOTH URBAN AND RURAL AREAS PROVIDING EQUAL OPPORTUNITIESAND LEVEL PLAYING FIELD FOR ALL PLAYERS .N. Employee’s Welfare ActivitiesCOMMITMENT TOWARDS THE PRINCIPLES OF CORPORATE SOCIAL RESPONSIBILITIES IS INBUILT WITHINTHE CORPORATE PHILOSOPHY OF BSNL. A VERY WIDE RANGE OF WELFARE PROGRAMMES , WITH AFOCUS ON THE EMPLOYEES ’ WELFARE IS CONTINUOUSLY IMPLEMENTED BY THE STAFF WELFAREBOARD OF THE COMPANY.O. Assistance during natural calamitiesBSNL ALWAYS REMAINS AWAKE OF ITS RESPONSIBILITY AS A CORPORATE CITIZEN . WHEN THEDESTRUCTIVE TSUNAMI WAVES STRUCK THE INDIAN SHORES , BSNL COMPANY SWUNG INTO ACTION 34
  35. 35. IMMEDIATELY FOR PROVIDING RELIEF TO THOSE AFFECTED IN THE COASTAL AREAS . COMMUNICATIONNETWORKS AT THE COASTAL AREAS OF TAMIL NADU, KERALA AND THE ANDAMAN AND NICOBARISLANDS – WORST HIT IN THE TSUNAMI - WERE PROMPTLY RESTORED WITHIN THE SHORTESTPOSSIBLE TIME . BSNL ALONG WITH THE EMPLOYEES CONTRIBUTED AN AMOUNT OF RS. 2,207LAKHS TO THE PRIME MINISTER’S RELIEF FUND. TELEPHONE SERVICES WERE RESTORED INRECORD TIME IN THE FLOOD - HIT AREAS OF GUJARAT AND MAHARASHTRA.1.2 POWERS & DUTIES OF OFFICERS AND WORKMENTHE POWERS & DUTIES OF THE OFFICERS AND WORKMEN OF THE COMPANY ARE DERIVED MAINLYFROM JOB DESCRIPTIONS , MANUALS , TERMS AND CONDITIONS OF APPOINTMENT AND DELEGATION OFAUTHORITIES ENUNCIATED BY THE COMPANY. THE WORKMEN OF THE COMPANY ARE APPOINTEDFOR CARRYING OUT THE BUSINESS OPERATIONS OF THE COMPANY, WHICH ARE IN LINE WITH THEOBJECTIVES SPECIFIED IN THE MEMORANDUM OF ASSOCIATION OF THE COMPANY.WHILE DISCHARGING DUTIES AND RESPONSIBILITIES , OFFICERS & WORKMEN OF THE COMPANY ARECOMPLYING WITH THE APPLICABLE PROVISIONS OF STATUTES AND RULES AND REGULATIONS FRAMEDTHERE UNDER1.3 PROCEDURES FOLLOWED IN THE DECISION-MAKING PROCESS,INCLUDING CHANNELS OF SUPERVISION AND ACCOUNTABILITY The decisions making process of the Company follows the following Channel BOARD OF DIRECTORS 35
  36. 36. CHAIRMAN AND MANAGING DIRECTOR1.4 THE NORMS SET FOR DISCHARGE OF FUNCTIONSTHE COMPANY HAS WELL DEFINED PROCEDURES AND GUIDELINES IN THE FORM OF DELEGATION OFPOWERS, LAID DOWN POLICIES AND GUIDELINES , MANUALS WITH A VIEW TO ENSURE COMPLIANCE OFPROVISIONS OF VARIOUS STATUTES , RULES AND REGULATIONS AND THE GUIDELINES OF DEPARTMENTOF PUBLIC ENTERPRISES, CENTRAL VIGILANCE COMMISSION AND OTHER CONCERNEDORGANIZATIONS .1.5 THE RULES, REGULATIONS, INSTRUCTIONS, MANUALS ANDRECORDS HELD BY THE COMPANY OR UNDER ITS CONTROL OR USEDBY ITS EMPLOYEES FOR DISCHARGE OF FUNCTIONSTHE OVERALL OBJECTIVES AND FRAMEWORK OF RULES AND REGULATIONS OF THE COMPANY IS LAIDDOWN IN THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANY. EACHDEPARTMENT OF THE COMPANY, WHILE DISCHARGING ITS FUNCTIONS , IS GUIDED BY MANUALS ,POLICY AND GUIDELINES , WHICH ARE PERIODICALLY REVIEWED AND UPDATED .MOST OF GROUP AN OFFICERS OF VARIOUS ORGANIZED CENTRAL SERVICES ARE ON DEEMEDDEPUTATION WITH THE COMPANY, WHO ARE GOVERNED BY THE RULES AND REGULATIONS OF THECENTRAL GOVERNMENT. SO FAR THE ABSORBED EMPLOYEES ARE CONCERNED , AT PRESENT,EXCEPT FOR THE RULES MADE BY THE BSNL; BROADLY , THEY ARE GOVERNED BY THE RULES ANDREGULATIONS OF THE CENTRAL GOVERNMENT.1.6. DOCUMENTS THAT ARE HELD BY THE COMPANY OR UNDER ITS CONTROL 36
  37. 37. THE COMPANY MAINTAINS VARIOUS STATUTORY DOCUMENTS, REGISTERS , BOOKS , LICENSES ,MANUALS , AND AGREEMENTS ETC . FOR THE BUSINESS OPERATION OF THE COMPANY, ASREQUIRED UNDER VARIOUS STATUTES , RULES AND REGULATIONS AS WELL AS FOR THE SMOOTHFUNCTIONING OF THE COMPANY.1.7. PARTICULARS OF ARRANGEMENT FOR CONSULTATION WITH THEMEMBERS OF THE PUBLIC IN RELATION TO THE FORMULATION OFPOLICY OR IMPLEMENTATION THEREOFBHARAT SANCHAR NIGAM LIMITED IS A COMMERCIAL ORGANIZATION AND POLICIESFORMULATED BY IT RELATE TO ITS INTERNAL MANAGEMENT AND THEREFORE , THERE IS NOREQUIREMENT FOR CONSULTATION WITH THE MEMBERS OF THE PUBLIC PRIOR TO FORMULATION OFITS INTERNAL POLICIES . HOWEVER, INTERNAL POLICIES OF THE COMPANY ARE FORMULATED INCOMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE STATUTES , RULES AND REGULATIONS ETC.THE MEMBERS OF THE PUBLIC , WHO ARE DEALING WITH THE COMPANY IN ITS BUSINESSTRANSACTION HAVE ANY COMPLAINTS / GRIEVANCES , THEY CAN APPROACH THROUGH E - MAIL ORTHROUGH THE CONCERNED OFFICERS FOR REDRESSAL AS HOSTED IN THE WEB - SITEWWW . BSNL. CO . IN .1.8 STATEMENT ON THE BOARD & SUB COMMITTEES OF THE BOARDAND OTHER COMMITTEESTHE MANAGEMENT OF THE COMPANY IS VESTED WITH THE BOARD OF DIRECTORS. IN TERMS OFTHE ARTICLES OF ASSOCIATION OF THE COMPANY, THE BOARD OF DIRECTORS CAN HAVE MINIMUMTHREE DIRECTORS AND MAXIMUM FIFTEEN DIRECTORS. AT PRESENT, THERE ARE SIX WHOLE TIMEFUNCTIONAL DIRECTORS INCLUDING THE CHAIRMAN CUM MANAGING DIRECTOR , ONE PART- TIMEGOVERNMENT NOMINEE DIRECTOR. 37
  38. 38. THE MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD ARE NOTACCESSIBLE FOR PUBLIC. SIMILARLY THE MINUTES BOOKS OF THE BOARD OF DIRECTORS ANDCOMMITTEES OF THE BOARD ARE NOT OPEN FOR INSPECTION BY PUBLIC.FOR DETAILS OF THE NAMES, DESIGNATIONS AND TELEPHONE NUMBERS OF THE SENIOROFFICERS OF THE PUNJAB TELECOM CIRCLE, PLEASE REFER TO THE COMPANY’S WEBSITEBHARAT SANCHAR NIGAM LIMITED DOES NOT HAVE ANY DIRECT SUBSIDY SCHEMES / PROGRAMMESFOR PUBLIC . HOWEVER, BSNL IS OFFERING CONCESSIONAL TARIFF FOR RURAL SUBSCRIBERS WITHLOWER RENTAL AND HIGHER FREE CALLS AS COMPARED TO URBAN AREAS . THE DETAILS OFCOMPARATIVE TARIFF IS AS UNDER :MONTHLY RENTAL CHARGES FOR B-FONE(BASED ON EXCHANGE-SYSTEM CAPACITY) GENERAL PACKAGE OFFERED STANDARD PACKAGE OF Exchange Capacity BYBSNL TRAI RURAL RURAL LESS THAN 1000 LINES RS. 50 RS. 70 > 1000 LINES < 30000 LINES RS. 110 RS. 120 > 30000 LINES < 100000 RS. 150 RS. 200 LINES 100000 LINES & ABOVE RS. 210 RS. 2801.9 DIRECTORY OF OFFICERS & WORKMENBHARAT SANCHAR NIGAM LIMITED EMPLOYEE STRENGTH AS ON 31.3.2005 IS 339853.GROUPS B, C AND D LEVEL EMPLOYEES OF THE ERSTWHILE DEPARTMENTS OF 38
  39. 39. TELECOMMUNICATIONS HAVE ALREADY BEEN PERMANENTLY ABSORBED IN THE SERVICES OF THECOMPANY. OFFICERS OF VARIOUS ORGANIZED GROUP A SERVICES , THE MOST OF THEM ARE ONDEEMED DEPUTATION TO THE COMPANY.AS PER THE 20TH AMENDMENT (4 OF 2002) TO TTO’99 DATED 14.3.2002, THE TELECOMREGULATORY AUTHORITY OF INDIA (TRAI) HAD RECOMMENDED RATIONALISATION OF RENTAL FORRURAL SUBSCRIBERS BASED ON THE EXCHANGE SYSTEM CAPACITY OF THE ENTIRE SDCA ON LINESOF URBAN SUBSCRIBERS . HOWEVER, FOR THE BENEFIT OF RURAL SUBSCRIBERS BSNL CONTINUESTO CHARGE TARIFF FROM RURAL SUBSCRIBERS ON THE BASIS OF THE CAPACITY OF EXCHANGESYSTEM AS IT EXISTED PRIOR TO 15-8-1998, I.E. BEFORE THE LOCAL CALL AREA BECAME CO -TERMINUS WITH THE SHORT DISTANCE CHARGING AREA (SDCA), WITH ALL SUBSEQUENTAUGMENTATIONS TAKEN INTO ACCOUNT .1.10 ANNER OF EXECUTION OF SUBSIDY PROGRAMMES, INCLUDING THE AMOUNTS ALLOCATED AND THE DETAILS OF BENEFICIARIES OF SUCH PROGRAMMES.BSNL is extending rebate in rentals, registration, installation of phones etc to certaincategory of subscribers as detailed here under:1.11 PARTICULARS OF RECIPIENTS OF CONCESSIONS, PERMITS OR AUTHORISATIONS GRANTED BY THE COMPANY.Bharat Sanchar Nigam Limited does not grant any concession, permits orauthorization, except for appointing franchises and agents for sale of its services likePCO holders, franchises for BSNL services etc. 39
  40. 40. Category of person REBATE/CONCESSION I) REGISTRATION OF ONE TELEPHONE UNDER NON-OYTSenior citizens of the age of 65years and above SPECIAL CATEGORY WHICH IS PRIORITY CATEGORY . II) NO REGISTRATION CHARGES.Visually blind persons I) REGISTRATION OF ONE TELEPHONE UNDER NON-OYT SPECIAL CATEGORY . II) 50% REBATE IN NORMAL RENTAL CHARGES III ) 50% REBATE IN ANNUAL ADVANCE RENTALSFreedom fighters/ widows of I) REGISTRATION OF ONE TELEPHONE UNDER NON-OYT-freedom fighters getting pension SWS CATEGORY II) NO REGISTRATION CHARGES .under freedom fighter pension III ) NO INSTALLATION CHARGES .scheme IV ) 50% REBATE IN NORMAL RENTAL CHARGESGallantry Award winners I) REGISTRATION OF ONE TELEPHONE UNDER NON-OYT(Defense services) under SPECIAL CATEGORY II) NO REGISTRATION CHARGES .following categories- III ) NO INSTALLATION CHARGES .Param Vir Chakra IV ) NO RENTAL CHARGESAshok ChakraKirti ChakraVir chakraShaurya ChakraWar widows/Disabled soldiers I) REGISTRATION OF ONE TELEPHONE UNDER NON-OYT SPECIAL CATEGORY . II) NO REGISTRATION CHARGES . III ) 50% REBATE IN NORMAL RENTAL CHARGES IV ) NO INSTALLATION CHARGESAwardees of President’s Police I) REGISTRATION UNDER NON-OYT SPECIAL CATEGORY II) NO REGISTRATION CHARGES .medal for gallantry and widows of 40
  41. 41. III ) NO INSTALLATION CHARGES .awardees conferred such award IV ) NO RENTAL CHARGESposthumously. 1.12 DETAILS OF INFORMATION AVAILABLE OR HELD IN ELECTRONIC FORM THE INFORMATION RELATING TO COMPANY PROFILE / BUSINESS, PRODUCTS, SERVICES, FINANCIAL PERFORMANCE, SHAREHOLDING PATTERN ETC . IS AVAILABLE IN ELECTRONIC FORM , WHICH CAN BE OBTAINED FROM THE WEBSITE OF THE COMPANY FROM CHAPTERS I IN THIS MANUAL AND ALSO FROM ITS PUBLIC PORTAL WWW . BSNL. CO . IN . 1.15 PARTICULARS OF FACILITIES AVAILABLE TO CITIZENS FOR OBTAINING INFORMATION. BSNL IS MAINTAINING A CORPORATE WEBSITE WITH NAME WWW . BSNL. CO . IN CITIZENS DESIROUS OF OBTAINING INFORMATION MAY VISIT THE WEBSITE . MOST OF THE INFORMATION OF THE PUBLIC CONSUMPTION IS HOSTED PARTICULARLY VARIOUS SERVICES TARIFF PLANS & LINKS TO ITS SUBORDINATE UNITS WEBSITES . THE LIST OF INFORMATION OFFICERS I.E. UNDER THE RIGHT TO INFORMATION ACT CAN ALSO BE HAD FROM SECTION BSNL UNITS WEBSITE FROM WWW . BSNL. CO . IN WEBSITE .( BSNL UNITS WEBSITES ARE LINKED TO MAIN CORPORATE OFFICE WEB SITE). 1.16 NAMES, DESIGNATION AND OTHER PARTICULARS OF CENTRAL PUBLIC INFORMATION OFFFICERS. IN TERMS OF SECTION 5 (1) OF THE RIGHT TO INFORMATION ACT, 2005, THE COMPANY HAS DESIGNATED VARIOUS OFFICIALS AS INFORMATION OFFICERS (APIOS & PIO S) AND APPELLATE AUTHORITIES . THE LIST OF SUCH OFFICERS IS AVAILABLE AT THE PUNJAB TELECOM CIRCLE WEBSITE WWW . PUNJAB . BSNL . CO . IN/ ROIPUNJAB . HTMT HE CONCERN DESIGNATED APIOS, PIO, S CAN BE APPROACHED FOR GETTING THE INFORMATION AS PURSUANT TO THE RTI ACT 2005 AT VARIOUS PLACES 41
  42. 42. 1.BSNL: A F INANCIAL OVERVIEW 2.1:-FINANCIAL ANALYSIS OF BSNL 2.2:-INCOME, EXPENDITURE AND PROFIT : 2.3:-ACCOUNTING POLICIESFINANCE PROFILEBHARAT SANCHAR NIGAM LIMITED, THE LARGEST PUBLIC SECTOR UNDERTAKING OF THENATION, IS CERTAINLY ON A FINANCIAL GROUND THAT S SOUND .THE COMPANY HAS A NET WORTH OF RS. 88,128 CRORES (US$ 22.02 BILLION ), AUTHORIZEDEQUITY CAPITAL OF RS. 10,000 CRORES (US $ 2.50 BILLION ), PAID UP EQUITY SHARECAPITAL OF RS. 5,000 CRORES (US $ 1.25 BILLION ) AND REVENUES IS RS. 38053 CRORES(US $ 9.51 BILLION ) IN 2008-09. 42
  43. 43. 2.1 Financial Analysis of BSNL:-ON OCTOBER 1ST, 2000, BSNL WAS FORMED BY CONVERTING SERVICE PROVIDING FUNCTIONSOF ERSTWHILE DOT TO PROVIDE LEVEL PLAYING FIELD TO PRIVATE TELECOMS. SINCE THENBSNL HAS EMERGED AS THE 7TH LARGEST TELECOM OPERATING COMPANY IN THE WORLD.BSNL HAS PLAYED MAJOR ROLE IN SPREADING TELEPHONES TO RURAL AREAS OF THE COUNTRY ATAFFORDABLE RATES . AS PER TRAI REPORT “5.3 LAKH VILLAGES HAVE BEEN PROVIDED ACCESS TOTELECOM NETWORK THROUGH VPTS COVERING 87% OF THE VILLAGES . MOST OF THE VPTSHAVE BEEN PROVIDED BY BSNL. BSNL HAS PROVIDED 13.59 MILLION (JULY 2005) RURALDELS IN THE COUNTRY ”. BY THIS STATEMENT WE CAN JUDGE THE IMPORTANT ROLE PLAYED BYBSNL RIGHT FROM ITS INCEPTION .2.2 Income, Expenditure and Profit:FOLLOWING TABLE SHOWS I NCOME , EXPENDITURE AND PROFIT FIGURES OF BSNL FOR THE 5YEAR PERIOD SINCE ITS INCEPTION .TABLES. YEAR INCOME EXPENDITURE PROFIT PROFITNO. (Rs. in Crores) (Rs. in Crores) BEFORE TAX AFTER TAX (Rs. In Crores) (Rs. In Crores)1 1.10.2005 11699 10669 1030 747 TO 31.3.20062 2007 24681 20461 4220 6312 43
  44. 44. 3 2008 25892 25078 8136 14444 2009 33918 27163 6755 59765 2010 36090 29401 6689 10183Government has set ambitious targets for Telecom PSUs (MTNL and BSNL) forproviding a total of 12.50 CRORE TELEPHONES BY DECEMBER 2012 WITH A TARGETED MARKETSHARE OF 50%. HOWEVER OVERALL MARKET SHARE OF BOTH PSUS, WHICH WAS MORE THAN85 % AT THE TIME OF BSNL FORMATION , HAS DECLINED TO LESS THAN 37% AS ON DATE. I N THEFINANCIAL YEAR 2009-10, THE REVENUE FROM 9,447,357 CELLULAR SUBSCRIBERS (AS ONMARCH 31, 2010) STANDS AT 10.5% OF THE TOTAL REVENUE . LESS THAN 1% REVENUE CAMEFROM WLL SERVICES . WE GOT 44.68 % INCOME FROM BASIC TELEPHONE SERVICES WHILEPCO BUSINESS GAVE ANOTHER 17.34 % OF THE INCOME . REVENUE FROM BASIC SERVICESDURING 2001-05 WAS RS 23,080 CRORE, RS 21,545 CRORE, RS 23,954 CRORE, AND RS22,385 CRORE. IN THE FINANCIAL YEAR 2009-10, THE REVENUE FROM 35,859,482 BASICSUBSCRIBERS (AS ON MARCH 31, 2010) IS 62% OF THE TOTAL REVENUE .IN THE LAST 4 YRS , BSNL HAS RECEIVED RS 15,701 CRORE AS COMPENSATION FORMAINTENANCE OF VPT, ADC, AND IUC, WHICH IS 85% OF BSNL’S CUMULATIVE PROFITBEFORE TAX OF RS 18,477 CRORE DURING THE SAME PERIOD . BSNL HAS RECEIVED 100%REIMBURSEMENT OF LICENSE FEE FROM 2006-07 TO 2007-08. FOR 2008-09, THEREIMBURSEMENT OF LICENSE FEE IS RESTRICTED TO 2/3RD OF LICENSE FEE PAID WHICH WILL BEFURTHER RESTRICTED TO 1/3RD IN 2009-10. THEREAFTER, REIMBURSEMENT WILL BE NIL. IN THELAST 4 YRS BSNL HAS RECEIVED TOTAL LICENSE FEE REFUND OF RS 8,665 CRORE (BSNLPAID RS 15,498 CRORE AS LICENSE FEES ) AS A COMPENSATION FOR PROVIDING TELECOMSERVICES IN RURAL AREAS .THE TOTAL INCOME OF BSNL FOR THE FINANCIAL YEAR 2004-05 IS RS 36,090 CRORE ANDPROFIT BEFORE TAX (PBT) IS RS 6,688 CRORE WHICH IS ALMOST EQUAL TO ITS IUC OF RS6,035 CRORE. BSNL WILL HAVE TO PAY INCOME TAX ON 70% OF ITS PROFITS AND ONLY 30%WOULD BE EXEMPTED . IN THE ABSENCE OF SUCH EXEMPTION FROM THIS YEAR , BSNL WILL HAVETO RESORT TO BORROWING RESULTING IN SUBSTANTIAL INTEREST BURDEN. 44
  45. 45. BSNL’S EXPENSES ON STAFF HAVE SHOT- UP BY 218.75% IN THE LAST FOUR YEARS FROM RS3,848 CRORE IN 2001-02 TO RS 8,418 CRORE IN 2004-05. FOR THE FINANCIAL YEAR2004-05, EXPENSES ON STAFF ARE 28.63% OF THE TOTAL EXPENSES . SIMILARLY, THEADMINISTRATION AND OPERATIONAL COSTS HAVE ALSO INCREASED BY 199% FROM RS 3,995CRORE IN 2001-02 TO RS 7,951 CRORE IN 2004-05. FOR THE FINANCIAL YEAR 2004-05,EXPENSES ON ADMINISTRATION AND OPERATION ARE 27.05% OF THE TOTAL EXPENSES .TOGETHER THESE TWO EXPENSES ARE 55.68% OF THE TOTAL EXPENSES IN 2004-05.BSNL AS A BUSINESS ENTITY HAS PERFORMED WELL SO FAR EVEN THOUGH THERE ARE SOMEDISTURBING TRENDS ALSO LIKE BIG INCREASE ON STAFF COST AND ADMINISTRATIVE EXPENDITURE .BSNL’S STAFF COST IS HIGHEST AMONG INDUSTRY BARRING ONLY TO MTNL. WHILE INDUSTRYAVERAGE OF STAFF COST IS ABOUT 4-6 % OF AGR SAME FIGURE FOR BSNL IS MORE THAN 25%. DESPITE ALL CONSTRAINS OF THE LEGACY NETWORK AND LARGE STAFF OVERALL PERFORMANCEOF BSNL IS SATISFACTORY . BSNL DOES NOT HAVE SUBSTANTIAL DEBT SO OUT GO ON THE PARTOF INTEREST PAYMENT IS SMALL . BSNL’S PERFORMANCE IN MOBILE BUSINESS IS AVERAGE .BSNL STARTED GETTING MORE THAN 10 % OF ITS REVENUE FROM THIS SEGMENT AT THE END OFYEAR 2005. MORE EFFORTS ARE REQUIRED ON THIS FRONT . BROADBAND IS OTHER PROMISINGAREA WHERE LOT OF EFFORTS IS REQUIRED . MARKETING OF SERVICES IS NOT UP TO THE MARK ANDSOME SERIOUS STEPS NEEDS TO BE TAKEN IN THIS AREA BECAUSE CUSTOMER ACQUISITION ANDRETENTION IS OF PRIME IMPORTANCE IN THE HIGHLY VOLATILE TELECOM MARKET PLACE WHERE HIGHCHURNING AND LOW CUSTOMER LOYALTY ARE THE CHARACTERISTICS . DESPITE ALL THIS GROWTH INTHE TELECOM SECTOR THE DIGITAL DIVIDE IS CONTINUOUSLY INCREASING . GAP BETWEEN URBANTELE -DENSITY AND RURAL TELE -DENSITY IS WIDENING . PRIVATE PLAYERS ARE LESS INTERESTED INHIGH INVESTMENT ORIENTED AND LOW RETURN PAYING RURAL I NDIA BUT FOR BSNL THERE IS A BIGOPPORTUNITY HERE BECAUSE BSNL ALREADY HAS A LARGE NETWORK OF MORE THAN 36000DIGITAL EXCHANGES CONNECTED BY OFC BACKBONE . BSNL CAN HARP ON ITS EXISTINGINFRASTRUCTURE TO POSITION ITSELF AS FORMIDABLE PLAYER . 45
  46. 46. 2.3 ACCOUNTING POLICIES (SCHEDULE T)2.3 .1 BASIS OF PREPARATION OF FINANCIAL STATEMENTSTHE FINANCIAL STATEMENTS OF BHARAT SANCHAR NIGAM LIMITED (THE “COMPANY” OR “BSNL”)AREPREPARED UNDER THE HISTORICAL COST CONVENTION ADOPTING THE ACCRUAL METHOD OFACCOUNTING INACCORDANCE WITH I NDIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND IN ACCORDANCEWITH THEPROVISIONS OF THE COMPANIES ACT, 1956 (THE “ACT”).2.3 .2 REVENUE RECOGNITIONINCOME FROM SERVICES IS ACCOUNTED FOR ON ACCRUAL BASIS AND IN CONFORMITY WITHACCOUNTING STANDARD – 9 OF ICAI. ACCORDINGLY ,A) REVENUE FOR ALL SERVICES IS RECOGNIZED WHEN EARNED AND ARE REALIZABLE AT THETIME OF BILLING . UNBILLED REVENUES FROM THE BILLING DATE TO THE END OF THE YEAR ARERECORDED AS ACCRUED REVENUE DURING THE PERIOD IN WHICH THE SERVICES ARE PROVIDED .PROVISION IS MADE IN RESPECT OF BILLS CONSIDERED TO BE DISPUTED (BY THE MANAGEMENT),DEBTS OUTSTANDING FOR MORE THAN TWO YEARS AND FOR DEBTS DUE FOR LESS THAN 2 YEARS ,TO THE EXTENT CONSIDERED NECESSARY BY THE MANAGEMENT . 46
  47. 47. B) INSTALLATION CHARGES RECOVERED FROM SUBSCRIBERS AT THE TIME OF NEW TELEPHONECONNECTIONS ARE RECOGNIZED AS INCOME IN THE FIRST YEAR OF THE BILLING .C) IN TERMS OF THE ARRANGEMENT BETWEEN DEPARTMENT OF TELECOMMUNICATIONS (“DOT”)AND THE COMPANY, THE CHARGES FOR TELECOMMUNICATION SERVICES AND OTHERINFRASTRUCTURAL SERVICES PROVIDED BY BSNL TO DOT ARE NEITHER BEING BILLED NORPROVIDED FOR .D) ALE PROCEEDS OF SCRAP ARISING FROM MAINTENANCE AND PROJECT WORKS ARE TAKEN INTOMISCELLANEOUS INCOME IN THE YEAR OF SALE .E) INCOME FROM SIMS, RECHARGE COUPONS OF MOBILE, PREPAID CALLING CARDS, ANDPREPAID INTERNET CONNECTION CARDS ARE TREATED AS INCOME OF THE YEAR IN WHICH THEPAYMENT IS RECEIVED SINCE THE EXTENT OF USE OF THESE CARDS WITHIN THE FINANCIAL YEARCOULD NOT BE ASCERTAINED .F) WHEREVER THERE IS UNCERTAINTY IN REALIZATION OF INCOME , SUCH AS LIQUIDATED DAMAGES ,CLAIMS ON GOVERNMENT DEPARTMENTS & LOCAL AUTHORITIES ETC., THESE ARE RECOGNIZED ONCOLLECTION BASIS . 47
  48. 48. G) THE CLAIMS ON ACCOUNT OF REIMBURSEMENT FOR PROVISION OF INFRASTRUCTURE , OPERATIONANDMAINTENANCE OF VILLAGE PUBLIC TELEPHONES (VPTS) AND RURAL HOUSEHOLD CONNECTIONS(RDELS) RECEIVABLE FROM U.S.O. FUND ARE ACCOUNTED FOR AS REVENUE ON ACCOUNT OFTHE FACT THAT THE CLAIM FOR INFRASTRUCTURE CANNOT BE CREDITED TO THE CONCERNED ASSETACCOUNT SINCE THE CLAIM AMOUNT COULD NOT BE SEGREGATED ASSET WISE.H) OTHER INCOME BY WAY OF INTEREST ON LOANS TO EMPLOYEES , SECURITY DEPOSIT WITHGOVERNMENTDEPARTMENTS AND LOCAL AUTHORITIES , BEING NOT MATERIAL, ARE ACCOUNTED FOR ONCOLLECTION . 2.3 .3 FIXED ASSETS3.1 :_FIXED ASSETS ARE CARRIED AT COST LESS DEPRECIATION . COST INCLUDES DIRECTLYRELATED ESTABLISHMENT AND OTHER EXPENSES INCLUDING EMPLOYEE REMUNERATION ANDBENEFITS, DIRECTLY IDENTIFIABLE TO THE 48
  49. 49. CONSTRUCTION OR CREATION OF THE ASSETS .3.2 :-EXPENDITURE ON REPLACEMENT OF ASSETS , EQUIPMENTS , INSTRUMENTS ANDREHABILITATION WORKS IS CAPITALIZED IF , IN THE OPINION OF THE MANAGEMENT , IT RESULTS INENHANCEMENT OF REVENUE GENERATING CAPACITY .3.3 :-ASSETS ARE CAPITALIZED TO THE EXTENT COMPLETION CERTIFICATES HAVE BEEN OBTAINED ,WHEREVER APPLICABLE .3.4 :-THE COST OF STORES AND MATERIALS AT THE TIME OF ISSUE TO A PROJECT IS DEBITEDTO CWIP.3.5 :-APPARATUS AND PLANTS PRINCIPALLY CONSISTING OF TELEPHONE EXCHANGES ,TRANSMISSION EQUIPMENTS AND AIR CONDITIONING PLANTS ETC. ARE CAPITALIZED AS AND WHEN ANEXCHANGE IS COMMISSIONED AND PUT TO USE .3.6 :-CABLES ARE CAPITALIZED AS AND WHEN READY FOR CONNECTION TO THE MAIN SYSTEM .3.7: - INTANGIBLE ASSETS ARE STATED AT COST OF ACQUIRING THE SAME LESS ACCUMULATEDDEPRECIATION /AMORTIZATION2.3 .4 DEPRECIATION/AMORTIZATIONDEPRECIATION IS PROVIDED BASED ON THE WRITTEN DOWN VALUE METHOD AT THE RATESPRESCRIBED INSCHEDULE XIV TO THE COMPANIES ACT, 1956 EXCEPT FOR SUBSCRIBER INSTALLATION. THESUBSCRIBERINSTALLATION IS DEPRECIATED OVER THE USEFUL LIFE OF 5 YEARS ON WRITTEN DOWN VALUEMETHOD . 49
  50. 50. ASSETS COSTING UP -TO RS. 5,000 ARE DEPRECIATED FULLY IN THE YEAR OF PURCHASE .SIMILARLY, PARTITION WORKS COSTING UP TO RS. 2, 00,000 ARE DEPRECIATED FULLY IN THEYEAR OF CONSTRUCTION .THE DEPRECIATION ON MACHINERY & TOOLS USED BOTH FOR PROJECT AND MAINTENANCE WORK ISCHARGED TO PROFIT AND LOSS ACCOUNT INSTEAD OF CAPITALIZATION . ALL TELEPHONE EXCHANGEBUILDINGS , ADMINISTRATIVE OFFICES AND CAPTIVE CONSUMPTION ASSEMBLINGPREMISES / WORKSHOPS ARE CONSIDERED AS NORMAL BUILDING AND NOT AS FACTORY BUILDING .ACCORDINGLY DEPRECIATION IS CHARGED UNIFORMLY . I NTANGIBLE ASSETS SUCH AS ENTRYLICENSE FEE FOR TELECOM SERVICE OPERATIONS ARE AMORTIZED OVER THE LICENSE PERIOD ( I. E.20 YEARS ) AND STANDALONE COMPUTER SOFTWARE APPLICATIONS ARE AMORTIZED OVER THELICENSE PERIOD SUBJECT TO MAXIMUM OF 10 YEARS AS PER STRAIGHT LINE METHOD .2.3 .5 IMPAIRMENT OF ASSETSASSETS, WHICH ARE IMPAIRED BY DISUSE OR OBSOLESCENCE , ARE SEGREGATED FROM THECONCERNED ASSETS CATEGORY AND SHOWN AS ‘DECOMMISSIONED ASSETS’ AND PROVISION MADEFOR THE LOSS , IF ANY, DUE TO THE DIFFERENCE BETWEEN THEIR NET CARRYING COST AND THE NETREALIZABLE VALUE .2.3 .6 INVESTMENTSLONG-TERM INVESTMENTS ARE CARRIED AT COST , AFTER PROVIDING FOR ANY DIMINUTION IN VALUE ,IF SUCH DIMINUTION IS OF A PERMANENT NATURE .2.3 .7 INVENTORIESINVENTORIES ARE VALUED AT COST OR NET REALIZABLE VALUE AS THE CASE MAY BE - COSTASCERTAINED GENERALLY ON WEIGHTED AVERAGE METHOD ; OBSOLETE / NON MOVING INVENTORIESARE VALUED AT NET REALIZABLE VALUE . 50
  51. 51. 2.3 .8 FOREIGN CURRENCY TRANSACTIONS(I) TRANSACTIONS IN FOREIGN CURRENCY ARE RECORDED AT THE EXCHANGE RATE PREVAILING ONTHE DATE OF THE TRANSACTION I. E . ON THE DATE OF PAYMENT OR RECEIPT AS THE CASE MAY BE .(II) ALL FOREIGN CURRENCY LIABILITIES AND MONETARY ASSETS ARE STATED AT THE EXCHANGERATE PREVAILING AS AT THE DATE OF BALANCE SHEET AND THE DIFFERENCE TAKEN TOPROFIT AND LOSS ACCOUNTS AS EXCHANGE FLUCTUATION LOSS OR GAIN.2.3 .9 EXTRAORDINARY ITEMSEXTRA-ORDINARY ITEMS OF INCOME AND EXPENDITURE , AS COVERED BY AS – 5, ARE DISCLOSEDSEPARATELY .2.3 .10 EMPLOYEES’ BENEFITS2.3 10.1 SHORT TERM EMPLOYEE BENEFITS:SHORT TERM EMPLOYEE BENEFITS ARE RECOGNIZED IN THE PERIOD DURING WHICH THE SERVICESHAVE BEEN RENDERED .2.3 10.2 LONG TERM EMPLOYEE BENEFITS:2.3 10.2.1 DEFINED CONTRIBUTION PLAN:A) PENSION CONTRIBUTION (INCLUDING GRATUITY )THE EMPLOYEES OF DOT WHO HAVE OPTED FOR ABSORPTION / ABSORBED IN THE COMPANY , ANDTHE EMPLOYEES ON DEEMED DEPUTATION FROM GOVERNMENT ARE ELIGIBLE FOR PENSION , WHICH ISA DEFINED CONTRIBUTION PLAN . THE COMPANY MAKES MONTHLY CONTRIBUTION (INCLUDING LIABILITYON ACCOUNT OF GRATUITY ) AT THE APPLICABLE RATES AS PER GOVERNMENT PENSION RULES,1972 AND FR & SR TO THE GOVERNMENT WHO ADMINISTERS THE SAME .B) EMPLOYEES’ PROVIDENT FUNDALL DIRECTLY RECRUITED EMPLOYEES OF THE COMPANY ARE ENTITLED TO RECEIVE BENEFITS UNDERTHE PROVIDENT FUND. BOTH EMPLOYEES AND EMPLOYER MAKE MONTHLY CONTRIBUTION TO THE 51
  52. 52. PLAN AT A PREDETERMINED RATE OF EMPLOYEE ’S BASIC SALARY AND DEARNESS ALLOWANCE .THESE CONTRIBUTIONS TO PROVIDENT FUND ARE ADMINISTERED BY THE PROVIDENT FUNDCOMMISSIONER. CONTRIBUTIONS TO PROVIDENT FUND ARE EXPENSED IN THE PROFIT AND LOSSACCOUNT .C) CONTRIBUTION FOR LEAVE SALARYFOR EMPLOYEES ON DEEMED DEPUTATION FROM GOVERNMENT, LEAVE SALARY CONTRIBUTION ISPROVIDED AND SUCH LEAVE SALARY CONTRIBUTION TAKES CARE OF LEAVE ENCASHMENT ALSO.2.3 10.2.2 DEFINED BENEFIT PLANS:A) LEAVE ENCASHMENT:THE LIABILITY ON ACCOUNT OF UNVEILED LEAVE IN RESPECT OF ABSORBED EMPLOYEES ANDDIRECTLY RECRUITED EMPLOYEES AT THE YEAR END IS FULLY PROVIDED FOR ON ESTIMATED BASIS .B) GRATUITYTHE COMPANY PROVIDES FOR GRATUITY , A DEFINED BENEFIT PLAN (THE GRATUITY PLAN) COVERINGALL DIRECTLY RECRUITED ELIGIBLE EMPLOYEES . I N ACCORDANCE WITH THE PAYMENT OF GRATUITYACT, 1972, THE GRATUITY PLAN PROVIDES A LUMP SUM PAYMENT TO VESTED EMPLOYEES ONRETIREMENT , DEATHS , INCAPACITATION OR TERMINATION OF EMPLOYMENT . LIABILITIES WITHREGARDS TO THE GRATUITY PLAN ARE DETERMINED BY ACTUARIAL VALUATION ON BALANCE SHEETDATE AND ARE EXPENSED IN THE PROFIT AND LOSS ACCOUNTC) OTHER BENEFITS INCLUDING POST EMPLOYMENT MEDICAL CAREMEDICAL REIMBURSEMENTS AND OTHER PERSONAL CLAIM BILLS OF EXISTING / RETIRED EMPLOYEESARE ACCOUNTED FOR ON ACTUAL BASIS IN RESPECT OF BILLS RECEIVED TILL THE CUT OFF PERIOD INTHE ACCOUNTS AT THE CONCERNED PRIMARY UNITS AS PER THE PRESCRIBED LIMITS .2.3 11. MANUFACTURING EXPENSESEXPENSES INCURRED AT FACTORY UNITS ARE ALLOCATED TO THE COST OF THE MANUFACTUREDPRODUCTS . 52
  53. 53. 2.3 12. PRIOR PERIOD ITEMSITEMS OF INCOME /EXPENDITURE EXCEEDING R S. 5 LAKH ARE ONLY CONSIDERED FOR BEINGTREATED AS PRIOR PERIOD ITEMS .2.3 13. TAXES ON INCOMETAXES ON I NCOME FOR THE CURRENT PERIOD ARE DETERMINED ON THE BASIS OF TAXABLE INCOMEAND TAX CREDITS COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE I NCOME TAX ACT,1961.IN ACCORDANCE WITH THE AS-22, DEFERRED TAX LIABILITY IS RECOGNIZED ON THE TIMINGDIFFERENCESBETWEEN ACCOUNTING INCOME AND THE TAXABLE INCOME FOR THE PERIOD TAKING INTOCONSIDERATION THE CONTENTS OF ACCOUNTING STANDARD INTERPRETATIONS 3 AND QUANTIFIEDUSING THE TAX RATES IN FORCE OR SUBSTANTIVELY ENACTED AS ON THE BALANCE SHEET DATE .DEFERRED TAX ASSETS ARE RECOGNIZED AND CARRIED FORWARD TO THE EXTENT THERE IS AVIRTUAL CERTAINTY THAT SUCH DEFERRED TAX ASSETS CAN BE REALIZED .2.3 14. PROVISIONSPROVISIONS ARE RECOGNIZED WHEN THE COMPANY HAS A PRESENT OBLIGATION AS A RESULT OFPAST EVENTS ; IT IS MORE LIKELY THAN NOT THAT AN OUTFLOW OF RESOURCES WILL BE REQUIREDTO SETTLE THE OBLIGATION ; AND THE AMOUNT HAS BEEN RELIABLY ESTIMATED.2.3 15. CONTINGENT LIABILITIESLIABILITIES, THOUGH CONTINGENT , ARE PROVIDED FOR IF THERE ARE REASONABLE CHANCES OFMATURING SUCH LIABILITIES AS PER MANAGEMENT. OTHER CONTINGENT LIABILITIES , BARRINGFRIVOLOUS CLAIMS , NOT ACKNOWLEDGED AS DEBTS , ARE DISCLOSED BY WAY OF NOTES . 53
  54. 54. 2.3 16. EARNING PER SHAREEARNINGS PER SHARE (“EPS”) COMPRISE THE NET PROFIT AFTER TAX(EXCLUDING EXTRAORDINARY INCOME NET OF TAX). THE NUMBER OF SHARES USED IN COMPUTINGBASIC & DILUTED EPS IS THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DURING THEYEAR.2.3 17. SEGMENT REPORTINGTHE PRIMARY SEGMENT CONSISTS OF ‘BASIC ’ AND ‘CELLULAR ’ SERVICES PROVIDED . THEMANUFACTURINGACTIVITIES HAVE NOT BEEN TREATED AS A SEPARATE SEGMENT SINCE SUCH ACTIVITIES AREESSENTIALLY CARRIED ON AS SUPPORT SERVICE TO OTHER SEGMENTS . THE FOLLOWING SPECIFICACCOUNTING POLICIES HAVE BEEN FOLLOWED FOR SEGMENT REPORTING : SEGMENT REVENUEINCLUDES SERVICE INCOME AND OTHER INCOME DIRECTLY IDENTIFIABLE WITH / ALLOCABLE TO THESEGMENT. I NCOME / EXPENSE , WHICH RELATES TO THE COMPANY, AS A WHOLE AND NOT ALLOCABLETO INDIVIDUAL BUSINESSSEGMENT IS INCLUDED IN “UN-ALLOCABLE CORPORATE INCOME/EXPENSE RESPECTIVELY ”.EXPENSES THAT ARE DIRECTLY IDENTIFIABLE WITH / ALLOCABLE TO SEGMENTS ARE CONSIDERED FORDETERMINING SEGMENT RESULTS. SEGMENT ASSETS AND LIABILITIES INCLUDE THOSE DIRECTLYIDENTIFIABLE WITH THE RESPECTIVE SEGMENTS . UNALLOWABLE CORPORATE ASSETS AND LIABILITIESREPRESENT THE ASSETS AND LIABILITIES THAT RELATE TO THE COMPANY AS A WHOLE AND NOTALLOCABLE TO ANY SEGMENT. . TELECOM SECTOR PROFILE.1. BACKGROUND 54
  55. 55. 4.2. ADMINISTRATION AND CONTROL4.4. ENTRY OF PRIVATE SECTOR4.5. REGULATORY CONTROL4.6. TELECOM POLICIES4.7. CORPORATIZATION4.8. OTHER GOVERNMENT ORGANIZATIONS UNDER TELECOM SECTOR4.9. DISINVESTMENT OF PSUS4.10 .FINANCIAL PERFORMANCE4.11. FOREIGN DIRECT INVESTMENT4.12. EMPLOYMENT GENERATION 55
  56. 56. 4.13. CONTRIBUTION OF THE PRIVATE AND PUBLIC SECTORS IN TELECOM NETWORK4.14. WIRELESS IN LOCAL LOOP (MOBILE) SERVICE VS . CELLULAR MOBILE TELEPHONE SERVICE 4.15. THE PICTURE AHEAD4.1. BACKGROUNDTELEPHONE SERVICES HAVE BEEN RECOGNIZED THE WORLD OVER AS AN IMPORTANT TOOL FORSOCIO - ECONOMIC DEVELOPMENT FOR A NATION AND HENCE TELECOM INFRASTRUCTURE IS REGARDEDAS A CRUCIAL FACTOR IN ACHIEVING THE SOCIO -ECONOMIC OBJECTIVES IN I NDIA . I NDIAN TELECOM ISMORE THAN 160 YEARS OLD BEGINNING WITH COMMISSIONING OF THE FIRST TELEGRAPH LINEBETWEEN KOLKATA AND DIAMOND HARBOUR IN 1839. IN 1948 INDIA HAD ONLY 0.1 MILLIONTELEPHONE CONNECTIONS WITH A TELEPHONE DENSITY OF ABOUT 0.02 TELEPHONES PERHUNDRED POPULATIONS. SINCE THEN INDIA HAS COME A LONG WAY AND BY 31 AUGUST2003 THERE WERE 45.6 MILLION TELEPHONE CONNECTIONS IN THE COUNTRY WITH A TELEPHONEDENSITY OF 5.72 TELEPHONES PER HUNDRED POPULATION .VARIOUS ADMINISTRATIVE AND FUNCTIONAL ASPECTS OF THE TELECOM SECTOR IN THE COUNTRY AREDISCUSSED BELOW :4.2. ADMINISTRATION AND CONTROLTHE TELECOM COMMISSION, SET UP IN APRIL 1989 HAS THE ADMINISTRATIVE AND FINANCIALPOWERS OF THE GOVERNMENT OF INDIA TO DEAL WITH VARIOUS ASPECTS OFTELECOMMUNICATIONS . THE TELECOM COMMISSION AND THE DEPARTMENT OF 56
  57. 57. TELECOMMUNICATIONS (DOT) ARE RESPONSIBLE FOR POLICY FORMULATION, LICENSING , WIRELESSSPECTRUM MANAGEMENT , ADMINISTRATIVE MONITORING OF PUBLIC SECTOR UNDERTAKINGS(PSUS) ENGAGED IN TELECOMMUNICATION SERVICES , RESEARCH AND DEVELOPMENT ANDSTANDARDIZATION / VALIDATION OF EQUIPMENT , ETC .4.3. TELECOM REFORMSTELECOM SERVICES AND MOST OF THE MANUFACTURING ACTIVITIES WERE TOTALLY UNDERGOVERNMENT DOMAIN TILL TELECOM REFORMS BEGAN IN 1980S WITH THE LAUNCH OF A “MISSIONBETTER COMMUNICATION” PROGRAMME. PRIVATE MANUFACTURING OF EQUIPMENT FORCUSTOMERS USE WAS ALLOWED IN 1984 AND THE CENTRE FOR DEVELOPMENT OF TELEMETRIC(C-DOT) WAS ESTABLISHED FOR THE DEVELOPMENT OF INDIGENOUS TECHNOLOGIES . TWO LARGECORPORATE ENTITIES WERE SPUN OFF FROM DOT NAMELY , MAHANAGAR TELEPHONE NIGAMLIMITED (MTNL) IN FEBRUARY 1986 FOR DELHI AND MUMBAI AND VIDESH SANCHAR NIGAMLIMITED (VSNL) IN MARCH 1986 FOR ALL INTERNATIONAL SERVICES . THIS BEGAN THE PROCESSOF CORPORATIZATION OF SERVICES THAT HAD HITHERTO BEEN UNDER A GOVERNMENT DEPARTMENT .4.4. ENTRY OF PRIVATE SECTORA PARADIGM SHIFT IN GOVERNMENT POLICY CAME IN THE EARLY NINETIES WHEN THETELECOMMUNICATION SECTOR WAS OPENED UP TO THE PRIVATE SECTOR . THE PROCESS OF ENTRYOF PRIVATE OPERATORS IN PROVIDING TELECOMMUNICATION SERVICES IN INDIA COMMENCED IN1992. APARTFROM PRIVATIZING BASIC TELEPHONE SERVICES GOVERNMENT ALSO DECIDED TO INTRODUCE ANUMBER OF VALUE ADDED SERVICES THROUGH PRIVATE OPERATORS , SUCH AS CELLULAR MOBILETELEPHONES, RADIO PAGING , E -MAIL , INTERNET, CLOSED USER GROUPS (CUG), ETC ., WHICH ADDTO THE VALUE OF THE EXISTING BASIC TELEPHONE SERVICES . 57
  58. 58. 4.5. REGULATORY CONTROLENTRY OF PRIVATE SERVICE PROVIDERS BROUGHT WITH IT THE INEVITABLE NEED FOR INDEPENDENTREGULATION . TELECOM REGULATORY AUTHORITY OF I NDIA (TRAI) WAS THUS ESTABLISHED WITHEFFECT FROM 20 FEBRUARY 1997 BY AN ACT OF PARLIAMENT CALLED TELECOM REGULATORYAUTHORITY OF I NDIA ACT, 1997, TO REGULATE THE TELECOM SERVICES , INCLUDINGFIXATION / REVISION OF TARIFFS FOR TELECOM SERVICES WHICH WERE EARLIER VESTED IN THECENTRAL GOVERNMENT. THE TRAI ACT WAS AMENDED BY AN ORDINANCE EFFECTIVE FROM 24JANUARY 2000 SEPARATING THE ADJUDICATORY AND DISPUTES FUNCTIONS FROM THE TRAI BYESTABLISHING A TELECOMMUNICATIONS DISPUTE SETTLEMENT AND APPELLATE TRIBUNAL(TDSAT). TDSAT ADJUDICATES ANY DISPUTE BETWEEN A LICENSOR AND A LICENSEE , BETWEENTWO OR MORE SERVICE PROVIDERS , BETWEEN A SERVICE PROVIDER AND GROUP OF CONSUMERS ,AND TO HEAR AND DISPOSE OF APPEALS AGAINST ANY DIRECTION , DECISION OR ORDER OF TRAI. ABETTER MODEL WOULD HAVE BEEN TO PUT THE INDEPENDENT REGULATOR IN PLACE EARLY IN THENINETIES ALONG WITH THE OPENING UP OF SERVICES TO THE PRIVATE SECTOR .KEEPING IN VIEW THE INCREASING CONVERGENCE OF TELECOM , COMPUTERS , TELEVISION ANDELECTRONICS THE GOVERNMENT OF INDIA INTRODUCED THE COMMUNICATION CONVERGENCE BILL2001 IN THE LOK SABHA ON 31 AUGUST 2001; THIS WAS THEREAFTER SENT TO THEPARLIAMENTARY STANDING COMMITTEE ON COMMUNICATIONS AND INFORMATION TECHNOLOGYWHICH HAS PRESENTED ITS REPORT TO THE PARLIAMENT IN NOVEMBER 2002 AND THEOBSERVATIONS AND RECOMMENDATIONS MADE BY IT WERE UNDER CONSIDERATION . THE BILL AIMSAT PROMOTING , FACILITATING AND DEVELOPING IN AN ORDERLY MANNER THE CARRIAGE ANDCONTENT OF COMMUNICATIONS (INCLUDING BROADCASTING , TELECOMMUNICATIONS AND MULTIMEDIA ),IN VIEW OF THE NECESSITY TO FACILITATE DEVELOPMENT OF A NATIONAL INFRASTRUCTURE FOR ANINFORMATION BASED SOCIETY , AND TO ENABLE ACCESS THERETO . I T ALSO SEEKS TO PROVIDE ACHOICE OF SERVICES TO THE PEOPLE WITH A VIEW TO PROMOTING PLURALITY OF NEWS , VIEWS ANDINFORMATION . THIS REGULATORY AND LICENSING AUTHORITY WILL BE KNOWN AS THE“COMMUNICATION COMMISSION OF I NDIA ”. THE LICENSING FUNCTION , PRESENTLY BEING HANDLEDBY DOT, WILL PASS ON TO THIS COMMISSION. HOWEVER, THE BILL IS YET TO BE PASSED .4.6 TELECOM POLICIESTHE FIRST NATIONAL TELECOM POLICY WAS ANNOUNCED IN 1994, WITH A MAJOR THRUST ON 58
  59. 59. UNIVERSAL SERVICE AND QUALITATIVE IMPROVEMENT IN TELECOM SERVICES AND ALSO, OPENING OFPRIVATE SECTOR PARTICIPATION IN BASIC TELEPHONE SERVICES . I N THE INITIAL ENTHUSIASM OFOPENING UP OF THE TELECOMMUNICATIONS SECTOR , THE PRIVATE OPERATORS , IN THEIR BIDS ,OFFERED MUCH HIGHER AMOUNTS OF LICENCE FEE THAN THEY COULD EVENTUALLY MUSTER. AS ARESULT BY MAY 1999, THEY HAD ACCUMULATED ARREARS TOTALING RS 3779.45 CROREPAYABLE TO GOVERNMENT. A MAJOR LANDMARK IN THE TELECOM SECTOR CAME WITH THE NEWTELECOM POLICY 1999 (NTP-99) WHICH ALLOWED PRIVATE OPERATORS TO MIGRATE FROM FIXEDLICENSE FEE REGIME TO A REVENUE SHARING REGIME . OTHER PROVISIONS IN NTP-99 WERE TOPERMIT INTERCONNECTIVITY AND SHARING OF INFRASTRUCTURE AMONG VARIOUS SERVICE PROVIDERSWITHIN THE SAME AREAS OF OPERATIONS , SEPARATION OF POLICY AND LICENSING FUNCTIONS OFDOT FROM THE SERVICE PROVISION FUNCTION , OPENING OF NATIONAL LONG DISTANCE SERVICES TOCOMPETITION AND CARRYING OF BOTH VOICE AND DATA TRAFFIC BY SERVICE PROVIDERS . AS OF 31MARCH 2003, UNRESTRICTED ENTRY HAS BEEN ALLOWED IN BASIC SERVICES ON REVENUE SHARINGBASIS , ALL TELECOM SERVICES HAVE BEEN OPENED UP FOR PRIVATE SECTOR PARTICIPATION ,NATIONAL AND INTERNATIONAL DATA CONNECTIVITY HAS BEEN OPENED TO ALL AND INTERNETSERVICES HAVE ALSO BEEN OPENED UP WITHOUT ANY RESTRICTION ON THE NUMBER OF ENTRANTSAND WITHOUT ANY ENTRY FEE. NATIONAL FREQUENCY ALLOCATION PLAN (NFAP-2002) HAS BEENEVOLVED IN LINE WITH THE RADIO REGULATIONS OF THE INTERNATIONAL TELECOM UNION (ITU)FOR CATERING TO THE CONFLICTING DEMAND ON SPECTRUM .4.7. CORPORATIZATIONAS A PART OF THE CONTINUING PROCESS OF OPENING UP OF THE SECTOR , AND IN PURSUANCE OFNTP-99, DEPARTMENT OF TELECOM SERVICES (DTS) WAS CARVED OUT FROM DOT INOCTOBER 1999 FOR PROVIDING TELECOMMUNICATIONS SERVICES IN THE COUNTRY . SUBSEQUENTLYIN JULY 2000, DTS WAS BIFURCATED AND A NEW DEPARTMENT KNOWN AS THE DEPARTMENT OF 59
  60. 60. TELECOM OPERATIONS (DTO) WAS CREATED. DTS AND DTO WERE FINALLY CORPORATIZEDINTO A WHOLLY OWNED GOVERNMENT COMPANY NAMELY BHARAT SANCHAR NIGAM LIMITED(BSNL) (INCORPORATED ON 15 SEPTEMBER 2000) AND THEIR BUSINESS OF PROVIDING TELECOMSERVICES IN THE COUNTRY WAS TRANSFERRED TO THIS COMPANY WITH EFFECT FROM 1 OCTOBER2000. THE CREATION OF BSNL IS EXPECTED TO PROVIDE A LEVEL PLAYING FIELD IN ALL AREASOF TELECOM SERVICES , BETWEEN GOVERNMENT OPERATORS AND PRIVATE OPERATORS .4.8. OTHER GOVERNMENT ORGANIZATIONS UNDER TELECOM SECTOR BESIDES MTNL, BSNL AND VSNL, OTHER GOVERNMENT OWNED PUBLIC SECTORUNDERTAKINGS UNDER TELECOM SECTOR WERE ITI LIMITED (ITI), HINDUSTAN TELEPRINTERSLIMITED (HTL), TELECOMMUNICATIONS CONSULTANTS INDIA LIMITED (TCIL), INTELLIGENTCOMMUNICATION SYSTEMS INDIA LIMITED (ICSIL) AND MILLENNIUM TELECOM LIMITED (MTL).ITI LIMITED WAS FORMED IN 1948 FOR MANUFACTURING A WIDE RANGE OF EQUIPMENT , WHICHINCLUDES ELECTRONIC SWITCHING EQUIPMENT, TRANSMISSION EQUIPMENT AND TELEPHONEINSTRUMENTS OF VARIOUS TYPES . HTL WAS ESTABLISHED IN DECEMBER 1960 FOR MANUFACTUREOF TELEPRINTERS AND ANCILLARY EQUIPMENT. TCIL WAS ESTABLISHED IN 1978 FOR PROVIDINGKNOW - HOW IN ALL THE FIELDS OF TELECOMMUNICATIONS AT GLOBAL LEVEL. THE CORE COMPETENCEOF TCIL IS IN COMMUNICATIONS NETWORK PROJECTS , SOFTWARE SUPPORT , SWITCHING ANDTRANSMISSION SYSTEMS , CELLULAR SERVICES , RURAL TELECOMMUNICATIONS AND OPTICAL FIBERBASED BACKBONE NETWORK . ICSIL WAS ESTABLISHED IN APRIL 1987 FOR MANUFACTURINGCOMPUTER BASED COMMUNICATION SYSTEMS AND EQUIPMENT. I T ALSO PROVIDES ENGINEERING ,TECHNICAL AND MANAGEMENT CONSULTANCY SERVICES FOR COMPUTERS AND COMMUNICATIONSSYSTEMS IN I NDIA AND ABROAD . MTL WAS ESTABLISHED IN FEBRUARY 2000 AS A WHOLLY OWNEDSUBSIDIARY OF MTNL FOR PROVISIONING OF I NTERNET SERVICES IN THE COUNTRY . I T IS PURSUINGESTABLISHMENT OF BROADBAND INTERNET ACCESS FOR THE CORPORATE SEGMENT AND VOICE 60
  61. 61. OVER INTERNET PROTOCOL (VOIP) TELEPHONY SERVICES THROUGHOUT I NDIA WITH USE OFRELEVANT TECHNOLOGIES LIKE VSATS ETC.IN ADDITION TO C-DOT AND TELECOM COMMISSION, OTHER GOVERNMENT ORGANIZATIONSENGAGED IN THE TELECOM SECTOR (AS A PART OF DOT) WERE TELECOM ENGINEERING CENTRE(TEC) AND THE WIRELESS PLANNING AND COORDINATION (WPC) WING . C-DOT WASESTABLISHED IN 1984 WITH THE OBJECTIVE OF DEVELOPING A NEW GENERATION OF DIGITALSWITCHING ITEMS . C-DOT HAS DEVELOPED A WIDE RANGE OF SWITCHING AND TRANSMISSIONPRODUCTS BOTH FOR THE RURAL AND URBAN APPLICATIONS . TEC IS AN INSTITUTION , WHICH WORKSAS A PART OF DOT AND IS DEVOTED TO PRODUCT VALIDATION AND STANDARDIZATION FOR THE USERAGENCIES . I T ALSO PROVIDES TECHNICAL AND ENGINEERING SUPPORT TO TELECOM COMMISSIONAND FIELD UNITS . WPC IS A WING OF DOT THAT DEALS WITH THE POLICY OF SPECTRUMMANAGEMENT, LICENSING , FREQUENCY ASSIGNMENTS , INTERNATIONAL COORDINATION FOR SPECTRUMMANAGEMENT AND ADMINISTRATION OF THE INDIAN WIRELESS TELEGRAPH ACT 1933.4.9. DISINVESTMENT OF PSUS 61
  62. 62. GOVERNMENT HAS DISINVESTED ITS MAJOR SHAREHOLDING IN HTLDURING OCTOBER 2001 AND IN VSNL DURING FEBRUARY 2002 ANDSINCE THEN THESE UNDERTAKINGS HAS CEASED TO BE GOVERNMENT OWNEDPSUS.4.10. FINANCIAL PERFORMANCE 62

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