BSNL and MTNL Face Total Debt of Over Rs. 21,000 Crore

BSNL and MTNL Face Total Debt of Over Rs. 21,000 Crore

The total debt of state-run telecom companies MTNL and BSNL has increased to Rs. 21,208 crore at the end of June 2014.

It was Rs. 12,983 crore as of March 31, 2012, Parliament was informed on Friday. For BSNL, it was Rs. 3,335 crore, and MTNL - Rs. 9,648 crore.

"As on March 31 (2014), the total debts on the books of BSNL and MTNL are Rs. 5,948 and Rs. 14,210 crores respectively," Telecom Minister Ravi Shankar Prasad said in the Rajya Sabha.

He said further that total debt on BSNL as the end of June stood at Rs. 6,448 crore while it was Rs. 14,760 crore for MTNL.

That apart, market share for BSNL in mobile services has come down to 12.3 percent at the end of May 2014 from 13.27 percent at the end of March 2012. The market share of BSNL in landline segment has also reduced to 82.57 percent at end of May 2014, from 85.61 percent at the end of March 2012.

MTNL, which operates in Delhi and Mumbai, market share in mobile services and landline at the end of May 2014 stood at 4.83 percent and 57.43 percent respectively.

(Also See: Cheaper Mobiles and More: Budget 2014 Impact on Tech, Telecom, Internet Companies)

Prasad said that inability to expand coverage due to financial and procurement problems, lack of adequate skills set due to changing nature of technology and customer centric business with focus on sales, marketing and customer services are some of main reason for decline in market share of PSUs.

He said government has taken measures to revive the two state-run telecom firms which include waiver of Rs. 1,411 crore government loan to BSNL and financial support of Rs. 6,724.51 crore to BSNL and Rs. 4,533.97 crore to MTNL on surrender of broadband spectrum.

"Besides these measures government is engaged in formulating a coordinated plan aimed towards revival of BSNL and MTNL by addressing issues of high employee expenses and gainful utilisation of assets," Prasad said.

The minister said that BSNL and MTNL are separately preparing a revival plan for increasing revenue potential, identifying business opportunities, and organisational restructuring to enable them to grow into customer-centric companies with expertise in marketing and customer services delivery.

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