The Hindu : Shourie pessimistic, BSNL optimistic

Online edition of India's National Newspaper
Wednesday, May 14, 2003

National

National

Shourie pessimistic, BSNL optimistic

By Our Special Correspondent

NEW DELHI MAY 13. The impact of the rollback in phone tariffs would force BSNL to post losses of Rs. 1,000 crores during the current fiscal, said the Communications Minister, Arun Shourie. His pessimism was not shared by BSNL officials who said they would do their best to prevent their company from going into the red. The jolt to its financial health would lead to disarray in its network improvement and expansion plans. The worst hit would be district headquarters and below, especially rural areas.

In view of the BJP president, Venkaiah Naidu's direction to "let the people know the impact of the decision'', Mr. Shourie said the consequence will be threefold — infrastructure expansion will be "grossly affected'' ; network improvement, particularly the replacement of the faulty MARR technology-based phones, is bound to slow down ; and, network expansion in rural areas will be hit "drastically''.

Explaining the reason for BSNL's over-priced tariff of Rs. 7.20 for a three-minute call from fixed to cellular phones (to be halved from May 17), Mr. Shourie said the company was forced to make up in this manner for the disinclination to raise rentals.

According to the Minister, the loss in earnings due to the change in pulse rate will be Rs. 2,600 crores and the increase in free calls will set the corporation back by Rs. 876 crores. The two will wipe out the anticipated profits of Rs. 1,000 crores. BSNL had registered a surplus of Rs. 6,500 crores in the last fiscal. MTNL will lose revenue of Rs. 140 crores by doubling free calls from 30 to 60.

The Minister indicated that the two state-owned companies would appeal to the TRAI against the recommended IUC rates (company to company settlement rates for outgoing calls). "The IUC rates took into account the compensation for cellular firms. But the TRAI's January order on IUC rates placed a heavy burden on BSNL and MTNL. We will request BSNL and MTNL to point this out to TRAI,'' he said. The likelihood of the TRAI acquiescing to the request is high because in January, it was headed by former banker, M.S. Verma, and now its chief is Pradip Baijal who was chosen by Mr. Shourie for the job.

Responding to questions on the chaos in the heavily-used PCO sector, Mr. Shourie said it was for the consumers to persuade booth owners to charge proper rates "just like taxi meters''. BSNL and MTNL will, however, take steps to make coin operated PCOs relevant. A 90 second flat pulse will be charged for some time till a chip to distinguish between different pulse rates was inserted.

The Minister also lamented that BSNL was not being granted resources for expanding the network in rural areas. BSNL's plea for reimbursement of Rs. 2,300 from licence fee and spectrum fee was turned down. Out of the Rs. 1,270 crores that accrued to the universal service obligation (USO) fund, only Rs. 300 crores were disbursed. "We are told that the Indian Telegraph Act has to be changed before the rest of the money is given,'' he observed.

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