Mr. Amit Kumar Account officer Telecom

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 Administration
Submitted By;
Submitted To;
Vishnu Kumar Sharma Ms.Ruchi Khandelwal
MBA – III Sem ,
2009-2011
DEEPSHIKHA INSTITUTE OF MANAGEMENT STUDIES
ISI-17 RIICO INSTITUTIONAL AREA, SITAPURA
JAIPUR
PREFACE
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2. As the part of my MBA curriculum I was required to undergo summer training in a
business organization for eight or six weeks. I approached BHARAT SANCHAR
NIGAM LIMITTED for this purpose and got an opportunity to get training from Team
Leader 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 best
efforts to compile the data to the highest level of accuracy and give my views to the
best of my judgment.
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3. ACKNOWLEDGEMENT
I 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 the
project. I sincerely acknowledge her for extending their valuable guidance, support
for literature, critical reviews of project and the report and above all the moral
support She had provided to me with all stage of this project.
Vishnu kumar Sharma,
MBA – III Sem.
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4. EXECUTIVE SUMMARY
The project is an extensive report on how the BSNL company
markets its strategies and how the company has been able in
tackling the present tough competition and how it is cooping up by
the allegations of the quality of its products. The report begins with
the history of the products and the introduction of the BSNL
company.
This report also contains the basic marketing strategies that are
used by the BSNL company of manufacturing process, technology,
production policy, advertising, collaboration, export scenario, future
prospect and government policies. The report includes some of the
key salient features of market trend issues.
In today’s world of cut throat fierce competition, it is very essential
to not only exist but also to excel in the market. Today’s market is
enormously more complex. Hence forth, to survive in the market, the
company not only needs to maximize its profit but also needs to
satisfy its customers and should try to build upon there.
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5. Contents
S.no. Particulars Pages
1. Introduction
2. Financial Overview
4. Telecom profile
5. Indian Telecom Sector
6. Research Objective
7. Research Methodology
8. A Comprative Swot Analysis
9. Reactivation Of Dormant Retailers Findings
10. Suggestions
11. Annexure
12. Bibliography
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6. Company Proflie
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7. Introduction
Type Communication Service Provider
Availability Countrywide except Delhi & Mumbai
Owner The Government of India
Key people S.D. Saxena (CFO); A.K. Sinha (CEO)
Founded 19th century, incorporated 2000
Website www.bsnl.in
1.1 Overview of the BSNL:
BSNL is India's oldest and largest Communication Service Provider (CSP).
Currently BSNL has a customer base of 64.8 million (Basic & Mobile
telephony). It has footprints throughout India except for the metropolitan cities
of Mumbai and New Delhi which are managed by MTNL. As on March 31, 2010
BSNL commanded a customer base of 33.7 million Wireline, 3.6 million CDMA-
WLL and 27.5 million GSM Mobile subscribers. BSNL's earnings for the
Financial Year ending March 31, 2010 stood at INR 401.8b (US$ 9.09 b) with
net profit of INR 89.4b (US$ 2.02 billion). Today, BSNL is India's largest Telco
and one of the largest Public Sector Undertaking of the country with authorized
share capital of US$ 3.95 billion (INR 17,500 Crores) and networth of US$
14.32 billion.
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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 Organisation
History
The foundation of Telecom Network in India was laid by the British sometime in
19th century. The history of BSNL is linked with the beginning of Telecom in
India. In 19th century and for almost entire 20th century, the Telecom in India
was operated as a Government of India wing. Earlier it was part of erstwhile
Post & Telegraph Department (P&T). In 1975 the Department of Telecom (DoT)
was separated from P&T. DoT was responsible for running of Telecom services
in 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 a
well known fact that BSNL was carved out of Department of Telecom to provide
level playing field to private telecoms.Subsequently in 1990s the telecom sector
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9. was opened up by the Government for Private investment, therefore it became
necessary to separate the Government's policy wing from Operations wing. The
Government of India corporatised the operations wing of DoT on October 01,
2000 and named it as Bharat Sanchar Nigam Limited (BSNL).BSNL operates as
a public sector.
Main Services being provided by BSNL
BSNL provides almost every telecom service, however following are the main
Telecom 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.
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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 & Future
Since its corporatisation in October 2000, BSNL has been actively providing
connections in both Urban and Rural areas and the efficiency of the company
has drastically improved from the days when one had to wait for years to get a
phone connection to now when one can get a connection in even hours. Pre-
activated Mobile connections are available at many places across India. BSNL
has also unveiled very cost-effective Broadband internet access plans
(DataOne) targeted at homes and small businesses. At present BSNL enjoy's
47% of market share of ISP services.
Year of Broadband 2007
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11. Former Indian Communications Minister Thiru Dayanidhi Maran had declared
year 2010 as "Year of Broadband" in India and BSNL is gearing up to provide 5
million Broadband connectivity by the end of 2010. BSNL has upgraded existing
Dataone (Broadband) connections for a speed of up to 2 Mbit/s without any
extra cost. This 2 Mbit/s broadband service is being provided by BSNL at a cost
of just US$ 5.5 per month. Further, BSNL is planning to upgrade its broadband
services to Triple play (telecommunications) in 2010.
BSNL has been asked to add 108 million customers by 2010 by Former Indian
Communications Minister Thiru Dayanidhi Maran. With the frantic activity in the
communication sector in India, the target appears achievable, however due to
intense competition in Indian Telecom sector in recent past BSNL's growth has
slowed down.
BSNL is pioneer of Rural Telephony in India. BSNL has recently bagged 80% of
US$ 580 m (INR 2,500 crores) Rural Telephony project of Government of India.
Challenges
During Financial Year 2009-2010 (From April 01, 2009 to March 31,2010 )
BSNL has added 9.6 million new customers in various telephone services
taking its customer base to 64.8 million. BSNL's nearest competitor Bharti Airtel
is standing at a customer base of 39 million. However, despite impressive
growth shown by BSNL in recent times, the Fixed line customer base of BSNL
is declining. In order to woo back its fixed-line customers BSNL has brought
down long distance calling rate under OneIndia plan, however, the success of
the scheme is not known. However, BSNL faces bleak fiscal 2009-2010 as
users flee, which has been accepted by the CMD BSNL.
Presently there is an intense competition in Indian Telecom sector and various
Telcos are rolling out attractive schemes and are providing good customer
services. However, BSNL being legacy operator and its conversion from a
Government Department, earns lot of criticism for its poor customer service.
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12. Although in recent past there have been tremendous improvement in working of
BSNL but still it is much below the Industry's Expectations. A large aging
(average age 49 years(appx)) workforce (300,000 strong), which is mostly
semi-illetrate or illeterate is the main reason for the poor customer service.
Further, the Top management of BSNL is still working in BSNL on deputation
basis holding Government employee status thus having little commitment to the
organisation. Although in coming years the retirement profile of the workforce is
very fast and around 25% of existing workforce will retire by 2010, however, still
the workforce will be quite large by the industry standards. Quality of the
workforce will also remain an issue.
BSNL at Jaipur Circle
BSNL Jaipur Circle office is situated in City Center area. This office is
undertaking of office. This office are works various areas like Marketing,
Planning, Administrative, Operation & Management and Finance. Each
department works under GM telecom district.
GM delegates our some duties to DGM. DGM is the head of the
department. These posts are highly responsible because DGM is the main
person of the department and DGM gives various approvals of works. This
approval leaves various effect of the department like financial, working
efficiency, functions of departments and field officer works.
Basically BSNL city center works in departmental approaches or
functions. This office provides a support to other departments or employees of
BSNL. In this office calculated various function of employees like salary of
employees, 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 various
telephones/mobiles/broadband bills.
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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 country's
economy.
Objects
To be the Lead Telecom Services Provider.
To provide quality and reliable fixed telecom service to our customer and
thereby increase customer's confidence.
To provide mobile telephone service of high quality and become no. 1 GSM
operator in its area of operation.
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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 sector
communications company in India. It is the largest telecommunication company
in India and the sixth largest in the world. Its headquarters are at Statesman
House, Barakhamba Road, New Delhi. It has the status of Mini-ratana - a status
assigned to reputed Public Sector companies in India.
During the current financial year, the management based on physical verification
of fixed assets and inventory and reconciliation of various heads of assets and
liabilities in the subsidiary and general ledgers which has resulted into
increase/decrease in the following assets and liabilities taken over as on 01st
October 2000 amounting to net reduction in the assets of Rs. 5,910 lakh (P.Y. - Rs.
25,452 lakh):
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15. In pursuance of the Memorandum of Understanding dated 30th September
2000 executed between Government of India and BSNL, all assets and liabilities in
respect of business carried on by DTS and DTO were transferred to the Company
with effect from 01st October 2000 at a provisional value of Rs. 6,300,000 lakh and
up to previous financial year BSNL has identified net assets of Rs. 6,352,028 lakh
against 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) 1108
Revenues Strategies
The telecom sector is the most competitive sector post liberalization. This has
resulted in a movement from growth based business model that emphasized growth
in numbers to profit-based model where the success is measured by margins. BSNL
as part of the transition has to adopt both cost reduction and revenue enhancement
measures, which would directly impact profitability.
It is evident that there is a declining trend in basic services and there is
stagnation in cellular revenues. Revenue maximization strategies will have two
components, one internal to the organization and the other external. The internal
aspect would involve an initiative for change of process, technology, organizational
structure etc. In this context, revenue assurance is the key to improving the bottom
line for BSNL. This is proactive strategy to capture all revenues due for the services
provided. Presently, BSNL generates bills through different softwares across the
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16. zones of operation, which are disintegrated and provide only basic solutions. The
industry standard for revenue leakage is about 3 to 7% percent of revenue, which in
money terms translates to about Rs.2100 crores for BSNL. Therefore plugging
revenue leakages is just the first and most obvious part of a Revenue Assurance
initiative. 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 based
billing. This would require huge investment but the return would more than
commensurate. The software should be scalable and be able to incorporate all the
next generation value added services. The implementation of CDR based system
will also generate the following benefits:
 Plugging of leakage of revenue.
 Formulation of appropriate marketing strategies –
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17. Management Profile
Chief General Manager
(CGM)
Mr. Hinduja
GM Telecom District
Mr. Prashant Trivedi
Deputy General Manager DGM DGM
(DGM) (Operation & (Finance)
(Marketing, Planning & Management) Mr. S. D. Tyagi
Chief Accounting Officer TR CO Strategic Business Plans
Account officer TR AO Mob. AO Telecom
1st Mr. Manoj Yadav Revenue 2nd
Mr. 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
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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
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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
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20.  TARIFF
• EPABX
 EPABX
 FREE EPABX
 TARIFF
 CENTREX
 CENTREX TARIFF
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21. Profile of company top Management
Director (Operations) - Shri Rajesh Wadhwa
Shri Kuldeep Goyal has taken over as Chairman & Managing Director of BSNL on
August 1, 2007. Shri Kuldeep Goyal joined the Indian Telecommunication Service of
Govt. 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 of
strategy for expansion of BSNL's network.
With more than 35 years of service, Shri Goyal has vast experience in telecom
sector viz. planning, installation, operation and maintenance of wirelines and
wireless services, data services, computerization of various activities in telecom
network and provision of value added services.
While working as chief General Manager, Maharashtra Telecom circle, he was in
charge for operations, planning and expansion of telecom network of the largest
circle of BSNL and contributed to rapid growth of telecom networks in Maharashtra
and Goa. During his short tenure of ten months as Executive Director, MTNL
Mumbai, he was able to double the connections in GSM network of MTNL Mumbai
and MTNL's market share was enhanced from 8.93% to 15.5%. During his tenure,
broadband service was also started in January 2005 and 40000 subscribers were
enrolled during a short period of nine months. Shri Goyal has worked in Yemen on a
foreign project through Telecommunications Consultants India Ltd. He was also a
Member of National Working Group of ITU-T Study Group 2 on operational aspect
of service,
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22. PROVISION AND PERFORMANCE OF TELECOM NETWORKS AND PARTICIPATED IN MEETING OF ITU-T
STUDY GROUP 2 AT GENEVA. SHRI GOYAL HAS DELIVERED A NUMBER OF TALKS ON VARIOUS
TOPICS RELATING TO TELECOM IN VARIOUS FORUMS LIKE GSM ASSOCIATION, INSTITUTE OF
ENGINEERS, INSTITUTE OF ELECTRICAL AND TELECOMMUNICATIONS ENGINEERS, CII, DOOR
DARSHAN 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.SAXENA
SHRI S.D.SAXENA WAS APPOINTED DIRECTOR (FINANCE), BSNL ON OFFICIATING BASIS IN
APRIL 2002 AND HAS BEEN WORKING AS DIRECTOR (FINANCE) ON REGULAR BASIS SINCE
29.10.2003. SHRI SAXENA HOLDS AN EXCELLENT ACADEMIC RECORD . HE IS M.SC. (PHYSICS)
AND MBA (FINANCIAL MANAGEMENT). WINNER OF MANY AWARDS AND MEDALS, HE WAS
AWARDED CHANCELLOR'S GOLD MEDAL FOR BEING THE MOST OUTSTANDING STUDENT IN THE
AGRA UNIVERSITY IN THE YEAR 1967. PRIOR TO JOINING THE GOVERNMENT OF INDIA THROUGH
THE IAS, ETC. EXAMINATION OF 1972 HE WAS A LECTURER IN PHYSICS AT THE UNIVERSITY OF
RAJASTHAN AT JAIPUR AND TAUGHT FOR SIX YEARS . DURING THIS PERIOD HE WAS ASSOCIATED
WITH 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-DOT
WITH SHRI SAM PITRODA AND PADMSHRI G.B. MEEMAMSI. HE WAS ALSO DIRECTOR (F) IN THE
E-10 B PROJECT FOR INDUCTION OF ELECTRONIC SWITCHING SYSTEM IN INDIAN TELECOM
NETWORK.
HE WAS IFA OF MAHANAGAR TELEPHONE NIGAM LTD. FOR 7 YEARS AND WAS ACTIVELY
INVOLVED IN THE GDR ISSUE, RATED AS ONE OF THE BEST GDRS BROUGHT OUT BY AN I NDIAN
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23. CORPORATE INCLUDING PRIVATE COMPANIES . HE WAS A MEMBER OF RAKESH MOHAN
INFRASTRUCTURE COMMITTEE WHICH MADE SIGNIFICANT RECOMMENDATIONS FOR THE GROWTH
AND DEVELOPMENT OF INDIAN INFRASTRUCTURE SECTOR . SHRI SAXENA HAS BEEN AN ACTING
MEMBER OF THE STUDY GROUP III UNDER THE AEGIS OF INTERNATIONAL TELECOMMUNICATION
UNION. HE WAS THE CHAIRMAN OF THE SPECIAL RAPPORTEUR GROUP OF STUDY GROUP III
FOR TELECOMMUNICATION STATISTICS WHICH MADE SIGNIFICANT CONTRIBUTIONS FOR THE
PRESENTATION 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 IN
FLORIANOPOLIS, BRAZIL.
HE HAS SPECIALISED IN TECHNO-ECONOMIES AND FINANCIAL MANAGEMENT OF TELECOM
COMPANIES WITH EMPHASIS ON TARIFF AND TARIFF BASED MARKETING .
DIRECTOR (PLANNING & NEW SERVICES)-SHRI R.K.AGGARWAL
SHRI 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 FIELDS
OF TELECOMMUNICATIONS . HE DID INSTALLATION OF C-400 CROSS BAR EXCHANGES TILL
1983. HE WAS SENT TO FRANCE FOR TRAINING FOR THE INSTALLATION OF DIGITAL ELECTRONIC
EXCHANGE OF E-10B MAKE IN 1983 AND THEREAFTER WORKED AS DEPUTY GENERAL
MANAGER (INSTALLATION) FOR E-10B EXCHANGES IN MTNL, MUMBAI FROM 1983 TILL
1991.
HE WAS DOT REPRESENTATIVE FOR THE SYSTEM SELECTION COMMITTEE SET UP TO FINALIZE
GATEWAY SWITCHES FOR VSNL. DURING 1990 HE REPRESENTED I NDIA FOR APT
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24. CONFERENCE IN I NDONESIA . HE WAS ALSO DEPUTED AS PROJECT DIRECTOR, TCIL TO
SULTANATE-OF-OMAN FROM 1991 TO 1996 WHERE HE HANDLED ALL THE PROJECTS RELATED
TO SETTING UP THE EXTERNAL PLANT NETWORK FOR COPPER CABLE AND OPTICAL FIBER
NETWORK IN SULTANATE-OF-OMAN. FROM 1996-98 HE WORKED AS CHIEF GENERAL
MANAGER, ANDAMAN & NICOBAR TELECOM CIRCLE AND THEREAFTER HANDLED THE CHARGE OF
JAIPUR TELECOM DISTRICT, RAJASTHAN FROM 1998-99. HE WAS POSTED AS GENERAL
MANAGER (DEVELOPMENT) IN PUNE IN 1999 AND WAS IN CHARGE OF COMPLETE PLANNING AND
INSTALLATION OF ALL SWITCHING AND TRANSMISSION NETWORK IN PUNE DISTRICT. HE WAS ALSO
IN -CHARGE OF COMPUTERIZATION AS WELL AS INTRODUCTION OF NEW SERVICES IN THE NETWORK
IN PUNE.
HE WAS CLOSELY INVOLVED WITH PLANNING , EVALUATION OF TENDER AS WELL AS IMPLEMENTATION
AND MAINTENANCE OF GSM MOBILE SERVICES IN MAHARASHTRA SINCE 2002. AS CHAIRMAN OF
THE VALIDATION COMMITTEE HE SUCCESSFULLY CARRIED OUT THE VALIDATION OF MOBILE SWITCH
FOR WEST ZONE INSTALLED AT PUNE. HE WAS IN- CHARGE OF ALL THE CENTRAL PLATFORMS FOR
GSM 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 OF
MOBILE NETWORK IN WEST ZONE FOR 4 MILLION LINES AND WAS INVOLVED IN THE COMMISSIONING
AND MAINTENANCE OF GSM MOBILE NETWORK. HE WAS ALSO CLOSELY INVOLVED WITH THE
SETTING UP OF CALL CENTRE AT PUNE FOR HANDLING CUSTOMER CARE AND MARKETING OF
MOBILE SERVICES TILL MAY, 2006.IN JUNE, 2006, HE WAS POSTED AS CHIEF GENERAL
MANAGER, BSNL BIHAR TELECOM CIRCLE. HE HAS TAKEN OVER THE CHARGE OF DIRECTOR
(PLANNING & NEW SERVICES) IN BSNL BOARD W.E.F. 11TH APRIL, 2008
PROFILE OF THE COMPANY’S BUSINESS
1. BASIC AND LIMITED MOBILE TELEPHONE SERVICES
BSNL 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.MILLION
TELEPHONES IN THE LIMITED MOBILE TELEPHONE SERVICES ARE EXISTING . BSNL HAS PROVIDES A
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25. NUMBER OF ATTRACTIVE TARIFF PACKAGES & PLANS WHICH SHALL FURTHER STRENGTHEN ITS
SUBSCRIBER BASE .
2. CELLULAR MOBILE TELEPHONE SERVICES
BSNL’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 on
31st Jan. 2009 out of which 1.16 Crore cellular telephones are in the prepaid
segment.
3. INTERNET SERVICES
BSNL offers Dialup Internet services to the customers by Post-paid service with the
brand name ‘Net one’, and pre-paid service with the brand name ‘Sancharnet’. The
post-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 PSTN
subscribers. The Internet Dhaba scheme of the Company aims to further promote
Internet 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 based
VPNs is a very useful service for Corporate, as it reduces the cost involved as well
as 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 Internet
Dhabas were 4143. A total of 708594 dial up Internet connections have been given
during 2007-2008, against a target of 7 lakhs. BSNL plans to give 1215980 more
dial up connections during the year 2008-09. As on 31.1.2009, there were 2367404
internet subscribers working in BSNL net work.
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26. 4. Intelligent Network
Intelligent Network Services is a service that incorporates several value added
facilities, thoroughly designed to save time and money, and enhance productivity. At
present, 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 the
commissioning of five numbers of new technology IN Platforms (Four General
purpose and One Mass Calling) at Kolkata, Bangalore, Ahmadabad and Hyderabad,
the India Telephone Card facility and new value added services are being provided
throughout the country. Activation of these new IN platforms had increased the sale
of ITC Cards taking the figure to Rs.265 crores in 2007-08 alone.
5. BROADBAND SERVICES
BSNL has launched its Broadband Services under the brand NAME ‘DATA One’ on
14/1/2005. This offers services like High Speed Internet Access with speed ranging
from 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 were
more than 356000 broad band connection provided by the BSNL. There are plans to
give 2 million and 3 million connections in 2008 and 2009 respectively.
DEVELOPMENT OF RURAL TELECOM NETWORK
1. Rural DELs
AS ON 31.03.2008, IN BSNL’S NETWORK , A TOTAL OF 1.356 CRORE RURAL TELEPHONE
CONNECTIONS WERE WORKING . AS ON 31.1.2009, THERE ARE 1.425 CRORE RURAL TELEPHONES
WORKING IN BSNL NETWORK .
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27. 2. (a) VILLAGE Public Telephones (VPTs) & RCPs:-
BSNL, in its unstinted efforts to make the slogan ‘Connecting India’, a reality, had
provided VPTs in 5, 18,992 villages up to 31.03.2008. The Company entered into an
agreement with USO Fund for expansion of rural telecom network by November
2009, by providing VPTs in 66,822 undisputed, undisturbed, accessible and
inhabited villages having population more than 100 as per Census, 1991 in the
country. BSNL PROVIDED VPTs in 5, 28,886 villages up to 31.01.2008. There are
plans to replace all MARR VPTs in the COUNTRY. As of now total 123194 MARR
VPTs already replaced in the country by BSNL. BSNL also committed to provide the
Rural Community Phones as per the USO Fund agreement. As of now around
13713 RCPs already provided by BSNL.
(b) Public Telephones:-
There are more than 2 million PCOs working in the BSNL Network out of which
around 1 million PCOs are having STD/ISD.
C. NETWORK MANAGEMENT
BSNL is committed to provide a robust state of the art infrastructure that will provide
stable and superior services to its customers. Accordingly, the MLLN network
covering more than 200 cities was made operational in May 2004. Since then, about
22000 circuits have been provided on this network. This has provided high level of
stability to the leased circuits and capability to offer N X 64 Kbps circuits. Keeping in
view the growing demand of leased circuits, the network is being expanded to cover
about 50 more locations and additional capacity at many existing locations is also
being provided.
27

28. To improve the operational efficiency of CCS 7 signaling, stand-alone signaling
transfer point (SSTP) equipment is being procured. This will also enable the
Company to measure signaling traffic of other operators, who are using its signaling
network for exchanging messages, especially with regard to cellular services. BSNL
has 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/ISD
network.
D. Setting up KU Band VSAT network
As regards the KU Band VSAT network equipment, the hub of this network is being
set up at BANGALORE; The equipment has been installed and expected to be
commissioned shortly. This will help your Company, to become a service provider
with all types of media equipment i.e. OFC, Microwave and satellite for provision of
bandwidth, this will also enable the Company to offer composite solutions to its
customers.
E. Policy on transmission network maintenance
TELECOM CIRCLES HAVE LARGE TRANSMISSION NETWORKS. TO IMPROVE THE MAINTENANCE OF
TRANSMISSION NETWORK , GUIDELINES FOR ROUTE PARTIES AND VEHICLES HAVE BEEN FORMALIZED.
TELECOM TERRITORIAL CIRCLES ARE ALSO BEING CONNECTED WITH COMPUTERIZED NETWORK FOR
BOOKING OF TRANSMISSION SYSTEM FAULTS , WITH A VIEW TO IMPROVE FOLLOW UP AND FASTER
RESTORATION OF FAULTS .
F. Annual Maintenance contracts for switching system & WLL
28

29. COMPREHENSIVE AMC, WHICH INCLUDES HARDWARE AND SOFTWARE MAINTENANCE AND UPGRADE ,
HAS BEEN ARRANGED WITH THE RESPECTIVE EQUIPMENT SUPPLIERS . INITIAL FEEDBACK SUGGESTS
THAT , AS A RESULT OF PREVENTIVE AND CORRECTIVE MAINTENANCE SUPPORT , THE PERFORMANCE OF
SWITCHES IS IMPROVING . DIFFICULTIES IN ENTERING INTO AMC WITH RURAL WLL EQUIPMENTS
SUPPLIERS HAVE BEEN RESOLVED AND PROCEDURES STREAMLINED SO THAT ADEQUATE MAINTENANCE
SUPPORT BECOMES AVAILABLE . AS A RESULT , THE PERFORMANCE OF WLL NETWORK IS IMPROVING .
AMC ARRANGEMENTS HAVE ALSO BEEN MADE WITH SUPPLIERS OF FWTS AND HAND HELD
TERMINALS .
G. Provision of SMPS with rural WLL DELs
WITH A VIEW TO INCREASE THE TALK TIME AND TO TAKE CARE OF POOR POWER SUPPLY CONDITIONS
IN RURAL AREAS , STEPS ARE TAKEN FOR PROCUREMENT OF SWITCH MODE POWER SUPPLY (SMPS)
WITH 7 AH
BATTERY . ALL NEW PROCUREMENTS OF WLL EQUIPMENT WILL NOW HAVE PROVISIONS FOR SMPS
WITH 7 AH BATTERY TO BE SUPPLIED ALONG WITH FWT S
H. 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. 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 0.58
I. COMPUTERISATION
IMPLEMENTATION OF INTER OPERATOR BILLING AND ACCOUNTING SYSTEM (IOBAS) HAS BEEN
COMPLETED. YOUR COMPANY PLANS TO PROVIDE CDR BASED CUSTOMER CARE AND
CONVERGENT BILLING SYSTEM . THIS WILL HELP COMPANY IN PROVIDING EFFECTIVE AND EFFICIENT
BILLING & CUSTOMER CARE SOLUTIONS FOR ITS FIXED LINE SUBSCRIBERS . IT ENVISAGES BUILDING
OF COUNTRY WIDE INTRANET TO REDUCE THE COST OF OPERATION , INCREASE REALIZATION , STOP
LEAKAGE OF REVENUE AND MINIMIZE FRAUDS, BESIDES PROVIDING ROUND THE CLOCK BEST
CUSTOMER CARE SERVICES TO THE COMPANY’S SUBSCRIBERS .
CALL CENTER FACILITY HAS BEEN INTRODUCED FOR 71 SSAS, WHICH IS A SINGLE POINT
APPROACH FOR ADDRESSING ALL CUSTOMER NEEDS CUM GRIEVANCES . WEB BASED PUBLIC
GRIEVANCE MANAGEMENT SYSTEM HAS BEEN IMPLEMENTED FOR SPEEDY DISPOSAL AND MONITORING
OF PUBLIC GRIEVANCES . WEB BASED INVENTORY MANAGEMENT PACKAGE HAS ALSO BEEN
INTRODUCED , THROUGH WHICH; MATERIAL MANAGEMENT FUNCTIONS ARE BEING COMPUTERIZED
GRADUALLY IN DIFFERENT CIRCLES . ONLINE MOBILE BILL VIEWING FACILITY HAS BEEN MADE
AVAILABLE TO ALL CELL ONE MOBILE CUSTOMERS (ALL STATES) THROUGH COMPANY’S PORTAL
(HTTP:// BSNL.IN). DUPLICATE TELEPHONE BILL VIEWING FACILITY FOR LANDLINE TELEPHONE HAS
ALSO BEEN MADE AVAILABLE AT MANY PLACES THROUGH WEBSITES OF RESPECTIVE TELECOM
CIRCLES .
J. BUSINESS DEVELOPMENT
BSNL IS OFFERING CUSTOMIZED ENTERPRISE NETWORK SOLUTION AND SERVICES TO THE
CORPORATE CUSTOMERS ON TURNKEY BASIS . THE COMPANY HAS EMPANELLED SYSTEM
INTEGRATORS AS BUSINESS ASSOCIATES TO IMPLEMENT THE WAN SOLUTION THROUGH LEASED
30

31. LINE / MPLS. YOUR COMPANY HAS PROVIDED BANDWIDTH FOR WAN NETWORK OF CORPORATE
LIKE SBI, PNB, ICICI, HPCL ETC . SOME OF THE WORKS WERE AWARDED TO BSNL AFTER
COMPETITIVE BID.
BSNL HAS ALSO ENTERED INTO MOUS WITH A NUMBER OF LEADING CORPORATE SUCH AS
NTPC, BPCL, UNION BANK OF INDIA (UBI), INDIAN AIRLINES (IAL), IFFCO, MCX, PNB
IN THE YEAR 2008-2009 FOR PROVIDING TOTAL TELECOM SOLUTION AND FOR HAVING SYNERGY OF
OPERATION WITH THESE ORGANIZATIONS .
EPABX MANUFACTURERS HAVE BEEN EMPANELLED TO PROVIDE “FREE OF COST EPABX
SYSTEMS” TO CORPORATE CUSTOMERS AS A BUSINESS DEVELOPMENT INITIATIVE TO RETAIN THE BIG
CORPORATE SUBSCRIBERS . AN EXCLUSIVE AGREEMENT HAS BEEN SIGNED WITH RAILTEL, TO
PROVIDE TELECOM SERVICE ON REVENUE SHARE BASIS BY CALL CENTRE’S, FOR CENTRALIZED
ENQUIRY FOR RAILWAYS. FURTHERMORE, YOUR COMPANY HAS ENTERED INTO AN AGREEMENT FOR
UTILIZING PRASAR BHARTI AND RAILTEL’S TOWERS FOR INSTALLING THE GSM ANTENNAS FOR
FASTER ROLLOUT OF GSM NETWORK.
K. INTERNATIONAL LONG DISTANCE (ILD)
SUBSEQUENT TO THE SIGNING OF MOU WITH SRI LANKA TELECOM (SLT), MICROWAVE LINK
BETWEEN INDIA AND SRI LANKA HAS BEEN COMMISSIONED. BSNL HAS STARTED ITS DIRECT ILD
SERVICES TO SRI LANKA UTILIZING THIS MICROWAVE LINK , WHICH WAS LAUNCHED BY HON’BLE
MOC AT CHENNAI ON 16TH OCTOBER 2009.
INTERNATIONAL SERVICE AGREEMENTS FOR ILD TRAFFIC WITH LEADING INTERNATIONAL CARRIERS
VIZ . TELEGLOBE CANADA, TELECOM ITALIA, MCI USA, SRI LANKA TELECOM, SINGTEL OPTUS,
FRANCE TELECOM ETC ., HAVE BEEN SIGNED . IN THE FIRST PHASE , OUTBOUND ILD TRAFFIC IS
BEING SENT THROUGH THESE CARRIERS .
31

32. BSNL HAS ALSO PLANNED TO LAY THE UNDERSEA SUBMARINE CABLE BETWEEN SRI LANKA AND
INDIA. THE LANDING STATION FOR SUBMARINE CABLE HAS BEEN IDENTIFIED AS TUTICORIN
(TAMILNADU). THIS CABLE WILL PROVIDE CONNECTIVITY TO OTHER INTERNATIONAL CABLE SYSTEM
FOR CARRYING VOICE & DATA TRAFFIC .
BSNL IS UPGRADING ITS 4 LEVEL-I TAXS I.E., MUMBAI, CHENNAI, NEW DELHI, KOLKATA, TO
INTERNATIONAL GATEWAY CAPABILITY ALONG WITH THE SETTING UP OF MONITORING FACILITY AT
THESE STATION .
L. CUSTOMER CARE
BSNL, WITH ITS ENDEAVOUR FOR HIGH CUSTOMER SATISFACTION , HAS BEEN PAYING GREAT
ATTENTION 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 OF
NEGOTIATION / 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 BILL
RETAIL OUTLETS PRESENTLY AVAILABLE AT BANGALORE, GURGAON AND NOIDA LIKELY TO BE
EXPANDED TO OTHER CITIES ; PAYMENT THROUGH INTERNET /ECS USING THE SERVICES OF
INTERMEDIARIES M/S BILL DESK AND M/S BILL JUNCTION RESPECTIVELY , AND , THROUGH
CREDIT/ DEBIT CARDS .
M. TELECOM FACTORIES
THE TELECOM FACTORIES OF BSNL LOCATED AT KOLKATA, GOPALPUR, KHARAGPUR, JABALPUR,
RICHHAI, BHILAI AND MUMBAI ARE IN -HOUSE MANUFACTURING UNITS CURRENTLY ENGAGED IN
32

33. PRODUCTION OF PAY PHONES, MINI PILLAR, CT BOX, DP BOX, LINE JACK UNIT, TOWERS AND
SS DROP WIRE , OFC ACCESSORIES, FDMS ETC. DURING 2008-09,
WITH A VIEW TO USE THE FACTORIES INFRASTRUCTURE AND WORKFORCE GAINFULLY , EFFORTS ARE
BEING MADE TO TIE UP WITH OTHER TECHNOLOGY PROVIDERS ETC .
N. OBLIGATIONS
1. Towards customers and dealers
TO PROVIDE PROMPT , COURTEOUS AND EFFICIENT SERVICE AND QUALITY OF PRODUCTS / SERVICES AT
FAIR 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 POLICIES
3. Towards the Society –Corporate Social Responsibilities
CORPORATE SOCIAL RESPONSIBILITIES
BSNL IS COMMITTED TO PROVIDE QUALITY TELECOM SERVICES AT AFFORDABLE PRICE TO THE
CITIZENS OF THE REMOTEST PART OF THE COUNTRY. BSNL IS MAKING ALL EFFORT TO ENSURE
33

34. THAT THE MAIN OBJECTIVES OF THE NEW TELECOM POLICY 1999 (SALIENT POINTS INDICATED
BELOW ) ARE ACHIEVED :
ACCESS TO TELECOMMUNICATIONS IS OF UTMOST IMPORTANCE FOR ACHIEVEMENT OF THE
COUNTRY ' S SOCIAL AND ECONOMIC GOALS . AVAILABILITY OF AFFORDABLE AND EFFECTIVE
COMMUNICATIONS FOR THE CITIZENS IS AT THE CORE OF THE VISION AND GOAL OF THE NEW
TELECOM POLICY 1999.
STRIVE TO PROVIDE A BALANCE BETWEEN THE PROVISION OF UNIVERSAL SERVICE TO ALL
UNCOVERED AREAS , INCLUDING THE RURAL AREAS , AND THE PROVISION OF HIGH - LEVEL SERVICES
CAPABLE OF MEETING THE NEEDS OF THE COUNTRY 'S ECONOMY ENCOURAGE DEVELOPMENT OF
TELECOMMUNICATION FACILITIES IN REMOTE , HILLY AND TRIBAL AREAS OF THE COUNTRY ;
TRANSFORM IN A TIME BOUND MANNER, THE TELECOMMUNICATIONS SECTOR TO A GREATER
COMPETITIVE ENVIRONMENT IN BOTH URBAN AND RURAL AREAS PROVIDING EQUAL OPPORTUNITIES
AND LEVEL PLAYING FIELD FOR ALL PLAYERS .
N. Employee’s Welfare Activities
COMMITMENT TOWARDS THE PRINCIPLES OF CORPORATE SOCIAL RESPONSIBILITIES IS INBUILT WITHIN
THE CORPORATE PHILOSOPHY OF BSNL. A VERY WIDE RANGE OF WELFARE PROGRAMMES , WITH A
FOCUS ON THE EMPLOYEES ’ WELFARE IS CONTINUOUSLY IMPLEMENTED BY THE STAFF WELFARE
BOARD OF THE COMPANY.
O. Assistance during natural calamities
BSNL ALWAYS REMAINS AWAKE OF ITS RESPONSIBILITY AS A CORPORATE CITIZEN . WHEN THE
DESTRUCTIVE TSUNAMI WAVES STRUCK THE INDIAN SHORES , BSNL COMPANY SWUNG INTO ACTION
34

35. IMMEDIATELY FOR PROVIDING RELIEF TO THOSE AFFECTED IN THE COASTAL AREAS . COMMUNICATION
NETWORKS AT THE COASTAL AREAS OF TAMIL NADU, KERALA AND THE ANDAMAN AND NICOBAR
ISLANDS – WORST HIT IN THE TSUNAMI - WERE PROMPTLY RESTORED WITHIN THE SHORTEST
POSSIBLE TIME . BSNL ALONG WITH THE EMPLOYEES CONTRIBUTED AN AMOUNT OF RS. 2,207
LAKHS TO THE PRIME MINISTER’S RELIEF FUND. TELEPHONE SERVICES WERE RESTORED IN
RECORD TIME IN THE FLOOD - HIT AREAS OF GUJARAT AND MAHARASHTRA.
1.2 POWERS & DUTIES OF OFFICERS AND WORKMEN
THE POWERS & DUTIES OF THE OFFICERS AND WORKMEN OF THE COMPANY ARE DERIVED MAINLY
FROM JOB DESCRIPTIONS , MANUALS , TERMS AND CONDITIONS OF APPOINTMENT AND DELEGATION OF
AUTHORITIES ENUNCIATED BY THE COMPANY. THE WORKMEN OF THE COMPANY ARE APPOINTED
FOR CARRYING OUT THE BUSINESS OPERATIONS OF THE COMPANY, WHICH ARE IN LINE WITH THE
OBJECTIVES SPECIFIED IN THE MEMORANDUM OF ASSOCIATION OF THE COMPANY.
WHILE DISCHARGING DUTIES AND RESPONSIBILITIES , OFFICERS & WORKMEN OF THE COMPANY ARE
COMPLYING WITH THE APPLICABLE PROVISIONS OF STATUTES AND RULES AND REGULATIONS FRAMED
THERE UNDER
1.3 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. CHAIRMAN AND MANAGING DIRECTOR
1.4 THE NORMS SET FOR DISCHARGE OF FUNCTIONS
THE COMPANY HAS WELL DEFINED PROCEDURES AND GUIDELINES IN THE FORM OF DELEGATION OF
POWERS, LAID DOWN POLICIES AND GUIDELINES , MANUALS WITH A VIEW TO ENSURE COMPLIANCE OF
PROVISIONS OF VARIOUS STATUTES , RULES AND REGULATIONS AND THE GUIDELINES OF DEPARTMENT
OF PUBLIC ENTERPRISES, CENTRAL VIGILANCE COMMISSION AND OTHER CONCERNED
ORGANIZATIONS .
1.5 THE RULES, REGULATIONS, INSTRUCTIONS, MANUALS AND
RECORDS HELD BY THE COMPANY OR UNDER ITS CONTROL OR USED
BY ITS EMPLOYEES FOR DISCHARGE OF FUNCTIONS
THE OVERALL OBJECTIVES AND FRAMEWORK OF RULES AND REGULATIONS OF THE COMPANY IS LAID
DOWN IN THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE COMPANY. EACH
DEPARTMENT 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 DEEMED
DEPUTATION WITH THE COMPANY, WHO ARE GOVERNED BY THE RULES AND REGULATIONS OF THE
CENTRAL 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 AND
REGULATIONS OF THE CENTRAL GOVERNMENT.
1.6. DOCUMENTS THAT ARE HELD BY THE COMPANY OR UNDER ITS
CONTROL
36

37. THE COMPANY MAINTAINS VARIOUS STATUTORY DOCUMENTS, REGISTERS , BOOKS , LICENSES ,
MANUALS , AND AGREEMENTS ETC . FOR THE BUSINESS OPERATION OF THE COMPANY, AS
REQUIRED UNDER VARIOUS STATUTES , RULES AND REGULATIONS AS WELL AS FOR THE SMOOTH
FUNCTIONING OF THE COMPANY.
1.7. PARTICULARS OF ARRANGEMENT FOR CONSULTATION WITH THE
MEMBERS OF THE PUBLIC IN RELATION TO THE FORMULATION OF
POLICY OR IMPLEMENTATION THEREOF
BHARAT SANCHAR NIGAM LIMITED IS A COMMERCIAL ORGANIZATION AND POLICIES
FORMULATED BY IT RELATE TO ITS INTERNAL MANAGEMENT AND THEREFORE , THERE IS NO
REQUIREMENT FOR CONSULTATION WITH THE MEMBERS OF THE PUBLIC PRIOR TO FORMULATION OF
ITS INTERNAL POLICIES . HOWEVER, INTERNAL POLICIES OF THE COMPANY ARE FORMULATED IN
COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE STATUTES , RULES AND REGULATIONS ETC.
THE MEMBERS OF THE PUBLIC , WHO ARE DEALING WITH THE COMPANY IN ITS BUSINESS
TRANSACTION HAVE ANY COMPLAINTS / GRIEVANCES , THEY CAN APPROACH THROUGH E - MAIL OR
THROUGH THE CONCERNED OFFICERS FOR REDRESSAL AS HOSTED IN THE WEB - SITE
WWW . BSNL. CO . IN .
1.8 STATEMENT ON THE BOARD & SUB COMMITTEES OF THE BOARD
AND OTHER COMMITTEES
THE MANAGEMENT OF THE COMPANY IS VESTED WITH THE BOARD OF DIRECTORS. IN TERMS OF
THE ARTICLES OF ASSOCIATION OF THE COMPANY, THE BOARD OF DIRECTORS CAN HAVE MINIMUM
THREE DIRECTORS AND MAXIMUM FIFTEEN DIRECTORS. AT PRESENT, THERE ARE SIX WHOLE TIME
FUNCTIONAL DIRECTORS INCLUDING THE CHAIRMAN CUM MANAGING DIRECTOR , ONE PART- TIME
GOVERNMENT NOMINEE DIRECTOR.
37

38. THE MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD ARE NOT
ACCESSIBLE FOR PUBLIC. SIMILARLY THE MINUTES BOOKS OF THE BOARD OF DIRECTORS AND
COMMITTEES OF THE BOARD ARE NOT OPEN FOR INSPECTION BY PUBLIC.
FOR DETAILS OF THE NAMES, DESIGNATIONS AND TELEPHONE NUMBERS OF THE SENIOR
OFFICER'S OF THE PUNJAB TELECOM CIRCLE, PLEASE REFER TO THE COMPANY’S WEBSITE
BHARAT SANCHAR NIGAM LIMITED DOES NOT HAVE ANY DIRECT SUBSIDY SCHEMES / PROGRAMMES
FOR PUBLIC . HOWEVER, BSNL IS OFFERING CONCESSIONAL TARIFF FOR RURAL SUBSCRIBERS WITH
LOWER RENTAL AND HIGHER FREE CALLS AS COMPARED TO URBAN AREAS . THE DETAILS OF
COMPARATIVE 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. 280
1.9 DIRECTORY OF OFFICERS & WORKMEN
BHARAT 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. TELECOMMUNICATIONS HAVE ALREADY BEEN PERMANENTLY ABSORBED IN THE SERVICES OF THE
COMPANY. OFFICERS OF VARIOUS ORGANIZED GROUP A SERVICES , THE MOST OF THEM ARE ON
DEEMED DEPUTATION TO THE COMPANY.
AS PER THE 20TH AMENDMENT (4 OF 2002) TO TTO’99 DATED 14.3.2002, THE TELECOM
REGULATORY AUTHORITY OF INDIA (TRAI) HAD RECOMMENDED RATIONALISATION OF RENTAL FOR
RURAL SUBSCRIBERS BASED ON THE EXCHANGE SYSTEM CAPACITY OF THE ENTIRE SDCA ON LINES
OF URBAN SUBSCRIBERS . HOWEVER, FOR THE BENEFIT OF RURAL SUBSCRIBERS BSNL CONTINUES
TO CHARGE TARIFF FROM RURAL SUBSCRIBERS ON THE BASIS OF THE CAPACITY OF EXCHANGE
SYSTEM 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 SUBSEQUENT
AUGMENTATIONS 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 certain
category 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 or
authorization, except for appointing franchises and agents for sale of its services like
PCO holders, franchises for BSNL services etc.
39

40. Category of person REBATE/CONCESSION
I) REGISTRATION OF ONE TELEPHONE UNDER NON-OYT
Senior citizens of the age of 65
years 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 RENTALS
Freedom 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 CHARGES
Gallantry 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 CHARGES
Ashok Chakra
Kirti Chakra
Vir chakra
Shaurya Chakra
War 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 CHARGES
Awardees of President’s Police I) REGISTRATION UNDER NON-OYT SPECIAL CATEGORY
II) NO REGISTRATION CHARGES .
medal for gallantry and widows of
40

41. III ) NO INSTALLATION CHARGES .
awardees conferred such award
IV ) NO RENTAL CHARGES
posthumously.
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. 1.BSNL: A F INANCIAL OVERVIEW
2.1:-FINANCIAL ANALYSIS OF BSNL
2.2:-INCOME, EXPENDITURE AND PROFIT :
2.3:-ACCOUNTING POLICIES
FINANCE PROFILE
BHARAT SANCHAR NIGAM LIMITED, THE LARGEST PUBLIC SECTOR UNDERTAKING OF THE
NATION, IS CERTAINLY ON A FINANCIAL GROUND THAT ' S SOUND .
THE COMPANY HAS A NET WORTH OF RS. 88,128 CRORES (US$ 22.02 BILLION ), AUTHORIZED
EQUITY CAPITAL OF RS. 10,000 CRORES (US $ 2.50 BILLION ), PAID UP EQUITY SHARE
CAPITAL OF RS. 5,000 CRORES (US $ 1.25 BILLION ) AND REVENUES IS RS. 38053 CRORES
(US $ 9.51 BILLION ) IN 2008-09.
42

43. 2.1 Financial Analysis of BSNL:-
ON OCTOBER 1ST, 2000, BSNL WAS FORMED BY CONVERTING SERVICE PROVIDING FUNCTIONS
OF ERSTWHILE DOT TO PROVIDE LEVEL PLAYING FIELD TO PRIVATE TELECOMS. SINCE THEN
BSNL 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 AT
AFFORDABLE RATES . AS PER TRAI REPORT “5.3 LAKH VILLAGES HAVE BEEN PROVIDED ACCESS TO
TELECOM NETWORK THROUGH VPTS COVERING 87% OF THE VILLAGES . MOST OF THE VPTS
HAVE BEEN PROVIDED BY BSNL. BSNL HAS PROVIDED 13.59 MILLION (JULY 2005) RURAL
DELS IN THE COUNTRY ”. BY THIS STATEMENT WE CAN JUDGE THE IMPORTANT ROLE PLAYED BY
BSNL RIGHT FROM ITS INCEPTION .
2.2 Income, Expenditure and Profit:
FOLLOWING TABLE SHOWS I NCOME , EXPENDITURE AND PROFIT FIGURES OF BSNL FOR THE 5
YEAR PERIOD SINCE ITS INCEPTION .
TABLE
S. YEAR INCOME EXPENDITURE PROFIT PROFIT
NO. (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
31.3.2006
2 2007 24681 20461 4220 6312
43

44. 3 2008 25892 25078 8136 1444
4 2009 33918 27163 6755 5976
5 2010 36090 29401 6689 10183
Government has set ambitious targets for Telecom PSUs (MTNL and BSNL) for
providing a total of 12.50 CRORE TELEPHONES BY DECEMBER 2012 WITH A TARGETED MARKET
SHARE OF 50%. HOWEVER OVERALL MARKET SHARE OF BOTH PSUS, WHICH WAS MORE THAN
85 % AT THE TIME OF BSNL FORMATION , HAS DECLINED TO LESS THAN 37% AS ON DATE. I N THE
FINANCIAL YEAR 2009-10, THE REVENUE FROM 9,447,357 CELLULAR SUBSCRIBERS (AS ON
MARCH 31, 2010) STANDS AT 10.5% OF THE TOTAL REVENUE . LESS THAN 1% REVENUE CAME
FROM WLL SERVICES . WE GOT 44.68 % INCOME FROM BASIC TELEPHONE SERVICES WHILE
PCO BUSINESS GAVE ANOTHER 17.34 % OF THE INCOME . REVENUE FROM BASIC SERVICES
DURING 2001-05 WAS RS 23,080 CRORE, RS 21,545 CRORE, RS 23,954 CRORE, AND RS
22,385 CRORE. IN THE FINANCIAL YEAR 2009-10, THE REVENUE FROM 35,859,482 BASIC
SUBSCRIBERS (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 FOR
MAINTENANCE OF VPT, ADC, AND IUC, WHICH IS 85% OF BSNL’S CUMULATIVE PROFIT
BEFORE 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, THE
REIMBURSEMENT OF LICENSE FEE IS RESTRICTED TO 2/3RD OF LICENSE FEE PAID WHICH WILL BE
FURTHER RESTRICTED TO 1/3RD IN 2009-10. THEREAFTER, REIMBURSEMENT WILL BE NIL. IN THE
LAST 4 YRS BSNL HAS RECEIVED TOTAL LICENSE FEE REFUND OF RS 8,665 CRORE (BSNL
PAID RS 15,498 CRORE AS LICENSE FEES ) AS A COMPENSATION FOR PROVIDING TELECOM
SERVICES IN RURAL AREAS .
THE TOTAL INCOME OF BSNL FOR THE FINANCIAL YEAR 2004-05 IS RS 36,090 CRORE AND
PROFIT BEFORE TAX (PBT) IS RS 6,688 CRORE WHICH IS ALMOST EQUAL TO ITS IUC OF RS
6,035 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 HAVE
TO RESORT TO BORROWING RESULTING IN SUBSTANTIAL INTEREST BURDEN.
44

45. BSNL’S EXPENSES ON STAFF HAVE SHOT- UP BY 218.75% IN THE LAST FOUR YEARS FROM RS
3,848 CRORE IN 2001-02 TO RS 8,418 CRORE IN 2004-05. FOR THE FINANCIAL YEAR
2004-05, EXPENSES ON STAFF ARE 28.63% OF THE TOTAL EXPENSES . SIMILARLY, THE
ADMINISTRATION AND OPERATIONAL COSTS HAVE ALSO INCREASED BY 199% FROM RS 3,995
CRORE 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 SOME
DISTURBING TRENDS ALSO LIKE BIG INCREASE ON STAFF COST AND ADMINISTRATIVE EXPENDITURE .
BSNL’S STAFF COST IS HIGHEST AMONG INDUSTRY BARRING ONLY TO MTNL. WHILE INDUSTRY
AVERAGE 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 PERFORMANCE
OF BSNL IS SATISFACTORY . BSNL DOES NOT HAVE SUBSTANTIAL DEBT SO OUT GO ON THE PART
OF 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 OF
YEAR 2005. MORE EFFORTS ARE REQUIRED ON THIS FRONT . BROADBAND IS OTHER PROMISING
AREA WHERE LOT OF EFFORTS IS REQUIRED . MARKETING OF SERVICES IS NOT UP TO THE MARK AND
SOME SERIOUS STEPS NEEDS TO BE TAKEN IN THIS AREA BECAUSE CUSTOMER ACQUISITION AND
RETENTION IS OF PRIME IMPORTANCE IN THE HIGHLY VOLATILE TELECOM MARKET PLACE WHERE HIGH
CHURNING AND LOW CUSTOMER LOYALTY ARE THE CHARACTERISTICS . DESPITE ALL THIS GROWTH IN
THE TELECOM SECTOR THE DIGITAL DIVIDE IS CONTINUOUSLY INCREASING . GAP BETWEEN URBAN
TELE -DENSITY AND RURAL TELE -DENSITY IS WIDENING . PRIVATE PLAYERS ARE LESS INTERESTED IN
HIGH INVESTMENT ORIENTED AND LOW RETURN PAYING RURAL I NDIA BUT FOR BSNL THERE IS A BIG
OPPORTUNITY HERE BECAUSE BSNL ALREADY HAS A LARGE NETWORK OF MORE THAN 36000
DIGITAL EXCHANGES CONNECTED BY OFC BACKBONE . BSNL CAN HARP ON ITS EXISTING
INFRASTRUCTURE TO POSITION ITSELF AS FORMIDABLE PLAYER .
45

46. 2.3 ACCOUNTING POLICIES
(SCHEDULE T)
2.3 .1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
THE FINANCIAL STATEMENTS OF BHARAT SANCHAR NIGAM LIMITED (THE “COMPANY” OR “BSNL”)
ARE
PREPARED UNDER THE HISTORICAL COST CONVENTION ADOPTING THE ACCRUAL METHOD OF
ACCOUNTING IN
ACCORDANCE WITH I NDIAN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND IN ACCORDANCE
WITH THE
PROVISIONS OF THE COMPANIES ACT, 1956 (THE “ACT”).
2.3 .2 REVENUE RECOGNITION
INCOME FROM SERVICES IS ACCOUNTED FOR ON ACCRUAL BASIS AND IN CONFORMITY WITH
ACCOUNTING STANDARD – 9 OF ICAI. ACCORDINGLY ,
A) REVENUE FOR ALL SERVICES IS RECOGNIZED WHEN EARNED AND ARE REALIZABLE AT THE
TIME OF BILLING . UNBILLED REVENUES FROM THE BILLING DATE TO THE END OF THE YEAR ARE
RECORDED 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. B) INSTALLATION CHARGES RECOVERED FROM SUBSCRIBERS AT THE TIME OF NEW TELEPHONE
CONNECTIONS 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 OTHER
INFRASTRUCTURAL SERVICES PROVIDED BY BSNL TO DOT ARE NEITHER BEING BILLED NOR
PROVIDED FOR .
D) ALE PROCEEDS OF SCRAP ARISING FROM MAINTENANCE AND PROJECT WORKS ARE TAKEN INTO
MISCELLANEOUS INCOME IN THE YEAR OF SALE .
E) INCOME FROM SIMS, RECHARGE COUPONS OF MOBILE, PREPAID CALLING CARDS, AND
PREPAID INTERNET CONNECTION CARDS ARE TREATED AS INCOME OF THE YEAR IN WHICH THE
PAYMENT IS RECEIVED SINCE THE EXTENT OF USE OF THESE CARDS WITHIN THE FINANCIAL YEAR
COULD 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 ON
COLLECTION BASIS .
47

48. G) THE CLAIMS ON ACCOUNT OF REIMBURSEMENT FOR PROVISION OF INFRASTRUCTURE , OPERATION
AND
MAINTENANCE OF VILLAGE PUBLIC TELEPHONES (VPTS) AND RURAL HOUSEHOLD CONNECTIONS
(RDELS) RECEIVABLE FROM U.S.O. FUND ARE ACCOUNTED FOR AS REVENUE ON ACCOUNT OF
THE FACT THAT THE CLAIM FOR INFRASTRUCTURE CANNOT BE CREDITED TO THE CONCERNED ASSET
ACCOUNT SINCE THE CLAIM AMOUNT COULD NOT BE SEGREGATED ASSET WISE.
H) OTHER INCOME BY WAY OF INTEREST ON LOANS TO EMPLOYEES , SECURITY DEPOSIT WITH
GOVERNMENT
DEPARTMENTS AND LOCAL AUTHORITIES , BEING NOT MATERIAL, ARE ACCOUNTED FOR ON
COLLECTION .
2.3 .3 FIXED ASSETS
3.1 :_FIXED ASSETS ARE CARRIED AT COST LESS DEPRECIATION . COST INCLUDES DIRECTLY
RELATED ESTABLISHMENT AND OTHER EXPENSES INCLUDING EMPLOYEE REMUNERATION AND
BENEFITS, DIRECTLY IDENTIFIABLE TO THE
48

49. CONSTRUCTION OR CREATION OF THE ASSETS .
3.2 :-EXPENDITURE ON REPLACEMENT OF ASSETS , EQUIPMENTS , INSTRUMENTS AND
REHABILITATION WORKS IS CAPITALIZED IF , IN THE OPINION OF THE MANAGEMENT , IT RESULTS IN
ENHANCEMENT 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 DEBITED
TO CWIP.
3.5 :-APPARATUS AND PLANTS PRINCIPALLY CONSISTING OF TELEPHONE EXCHANGES ,
TRANSMISSION EQUIPMENTS AND AIR CONDITIONING PLANTS ETC. ARE CAPITALIZED AS AND WHEN AN
EXCHANGE 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 ACCUMULATED
DEPRECIATION /
AMORTIZATION
2.3 .4 DEPRECIATION/AMORTIZATION
DEPRECIATION IS PROVIDED BASED ON THE WRITTEN DOWN VALUE METHOD AT THE RATES
PRESCRIBED IN
SCHEDULE XIV TO THE COMPANIES ACT, 1956 EXCEPT FOR SUBSCRIBER INSTALLATION. THE
SUBSCRIBER
INSTALLATION IS DEPRECIATED OVER THE USEFUL LIFE OF 5 YEARS ON WRITTEN DOWN VALUE
METHOD .
49

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 THE
YEAR OF CONSTRUCTION .
THE DEPRECIATION ON MACHINERY & TOOLS USED BOTH FOR PROJECT AND MAINTENANCE WORK IS
CHARGED TO PROFIT AND LOSS ACCOUNT INSTEAD OF CAPITALIZATION . ALL TELEPHONE EXCHANGE
BUILDINGS , ADMINISTRATIVE OFFICES AND CAPTIVE CONSUMPTION ASSEMBLING
PREMISES / WORKSHOPS ARE CONSIDERED AS NORMAL BUILDING AND NOT AS FACTORY BUILDING .
ACCORDINGLY DEPRECIATION IS CHARGED UNIFORMLY . I NTANGIBLE ASSETS SUCH AS ENTRY
LICENSE FEE FOR TELECOM SERVICE OPERATIONS ARE AMORTIZED OVER THE LICENSE PERIOD ( I. E.
20 YEARS ) AND STANDALONE COMPUTER SOFTWARE APPLICATIONS ARE AMORTIZED OVER THE
LICENSE PERIOD SUBJECT TO MAXIMUM OF 10 YEARS AS PER STRAIGHT LINE METHOD .
2.3 .5 IMPAIRMENT OF ASSETS
ASSETS, WHICH ARE IMPAIRED BY DISUSE OR OBSOLESCENCE , ARE SEGREGATED FROM THE
CONCERNED ASSETS CATEGORY AND SHOWN AS ‘DECOMMISSIONED ASSETS’ AND PROVISION MADE
FOR THE LOSS , IF ANY, DUE TO THE DIFFERENCE BETWEEN THEIR NET CARRYING COST AND THE NET
REALIZABLE VALUE .
2.3 .6 INVESTMENTS
LONG-TERM INVESTMENTS ARE CARRIED AT COST , AFTER PROVIDING FOR ANY DIMINUTION IN VALUE ,
IF SUCH DIMINUTION IS OF A PERMANENT NATURE .
2.3 .7 INVENTORIES
INVENTORIES ARE VALUED AT COST OR NET REALIZABLE VALUE AS THE CASE MAY BE - COST
ASCERTAINED GENERALLY ON WEIGHTED AVERAGE METHOD ; OBSOLETE / NON MOVING INVENTORIES
ARE VALUED AT NET REALIZABLE VALUE .
50

51. 2.3 .8 FOREIGN CURRENCY TRANSACTIONS
(I) TRANSACTIONS IN FOREIGN CURRENCY ARE RECORDED AT THE EXCHANGE RATE PREVAILING ON
THE 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 EXCHANGE
RATE PREVAILING AS AT THE DATE OF BALANCE SHEET AND THE DIFFERENCE TAKEN TO
PROFIT AND LOSS ACCOUNTS AS EXCHANGE FLUCTUATION LOSS OR GAIN.
2.3 .9 EXTRAORDINARY ITEMS
EXTRA-ORDINARY ITEMS OF INCOME AND EXPENDITURE , AS COVERED BY AS – 5, ARE DISCLOSED
SEPARATELY .
2.3 .10 EMPLOYEES’ BENEFITS
2.3 10.1 SHORT TERM EMPLOYEE BENEFITS:
SHORT TERM EMPLOYEE BENEFITS ARE RECOGNIZED IN THE PERIOD DURING WHICH THE SERVICES
HAVE 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 , AND
THE EMPLOYEES ON DEEMED DEPUTATION FROM GOVERNMENT ARE ELIGIBLE FOR PENSION , WHICH IS
A DEFINED CONTRIBUTION PLAN . THE COMPANY MAKES MONTHLY CONTRIBUTION (INCLUDING LIABILITY
ON 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 FUND
ALL DIRECTLY RECRUITED EMPLOYEES OF THE COMPANY ARE ENTITLED TO RECEIVE BENEFITS UNDER
THE PROVIDENT FUND. BOTH EMPLOYEES AND EMPLOYER MAKE MONTHLY CONTRIBUTION TO THE
51

52. PLAN AT A PREDETERMINED RATE OF EMPLOYEE ’S BASIC SALARY AND DEARNESS ALLOWANCE .
THESE CONTRIBUTIONS TO PROVIDENT FUND ARE ADMINISTERED BY THE PROVIDENT FUND
COMMISSIONER. CONTRIBUTIONS TO PROVIDENT FUND ARE EXPENSED IN THE PROFIT AND LOSS
ACCOUNT .
C) CONTRIBUTION FOR LEAVE SALARY
FOR EMPLOYEES ON DEEMED DEPUTATION FROM GOVERNMENT, LEAVE SALARY CONTRIBUTION IS
PROVIDED 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 AND
DIRECTLY RECRUITED EMPLOYEES AT THE YEAR END IS FULLY PROVIDED FOR ON ESTIMATED BASIS .
B) GRATUITY
THE COMPANY PROVIDES FOR GRATUITY , A DEFINED BENEFIT PLAN (THE GRATUITY PLAN) COVERING
ALL DIRECTLY RECRUITED ELIGIBLE EMPLOYEES . I N ACCORDANCE WITH THE PAYMENT OF GRATUITY
ACT, 1972, THE GRATUITY PLAN PROVIDES A LUMP SUM PAYMENT TO VESTED EMPLOYEES ON
RETIREMENT , DEATHS , INCAPACITATION OR TERMINATION OF EMPLOYMENT . LIABILITIES WITH
REGARDS TO THE GRATUITY PLAN ARE DETERMINED BY ACTUARIAL VALUATION ON BALANCE SHEET
DATE AND ARE EXPENSED IN THE PROFIT AND LOSS ACCOUNT
C) OTHER BENEFITS INCLUDING POST EMPLOYMENT MEDICAL CARE
MEDICAL REIMBURSEMENTS AND OTHER PERSONAL CLAIM BILLS OF EXISTING / RETIRED EMPLOYEES
ARE ACCOUNTED FOR ON ACTUAL BASIS IN RESPECT OF BILLS RECEIVED TILL THE CUT OFF PERIOD IN
THE ACCOUNTS AT THE CONCERNED PRIMARY UNITS AS PER THE PRESCRIBED LIMITS .
2.3 11. MANUFACTURING EXPENSES
EXPENSES INCURRED AT FACTORY UNITS ARE ALLOCATED TO THE COST OF THE MANUFACTURED
PRODUCTS .
52

53. 2.3 12. PRIOR PERIOD ITEMS
ITEMS OF INCOME /EXPENDITURE EXCEEDING R S. 5 LAKH ARE ONLY CONSIDERED FOR BEING
TREATED AS 'PRIOR PERIOD ITEMS '.
2.3 13. TAXES ON INCOME
TAXES ON I NCOME FOR THE CURRENT PERIOD ARE DETERMINED ON THE BASIS OF TAXABLE INCOME
AND 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 TIMING
DIFFERENCES
BETWEEN ACCOUNTING INCOME AND THE TAXABLE INCOME FOR THE PERIOD TAKING INTO
CONSIDERATION THE CONTENTS OF ACCOUNTING STANDARD INTERPRETATIONS 3 AND QUANTIFIED
USING 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 A
VIRTUAL CERTAINTY THAT SUCH DEFERRED TAX ASSETS CAN BE REALIZED .
2.3 14. PROVISIONS
PROVISIONS ARE RECOGNIZED WHEN THE COMPANY HAS A PRESENT OBLIGATION AS A RESULT OF
PAST EVENTS ; IT IS MORE LIKELY THAN NOT THAT AN OUTFLOW OF RESOURCES WILL BE REQUIRED
TO SETTLE THE OBLIGATION ; AND THE AMOUNT HAS BEEN RELIABLY ESTIMATED.
2.3 15. CONTINGENT LIABILITIES
LIABILITIES, THOUGH CONTINGENT , ARE PROVIDED FOR IF THERE ARE REASONABLE CHANCES OF
MATURING SUCH LIABILITIES AS PER MANAGEMENT. OTHER CONTINGENT LIABILITIES , BARRING
FRIVOLOUS CLAIMS , NOT ACKNOWLEDGED AS DEBTS , ARE DISCLOSED BY WAY OF NOTES .
53

54. 2.3 16. EARNING PER SHARE
EARNINGS PER SHARE (“EPS”) COMPRISE THE NET PROFIT AFTER TAX
(EXCLUDING EXTRAORDINARY INCOME NET OF TAX). THE NUMBER OF SHARES USED IN COMPUTING
BASIC & DILUTED EPS IS THE WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING DURING THE
YEAR.
2.3 17. SEGMENT REPORTING
THE PRIMARY SEGMENT CONSISTS OF ‘BASIC ’ AND ‘CELLULAR ’ SERVICES PROVIDED . THE
MANUFACTURING
ACTIVITIES HAVE NOT BEEN TREATED AS A SEPARATE SEGMENT SINCE SUCH ACTIVITIES ARE
ESSENTIALLY CARRIED ON AS SUPPORT SERVICE TO OTHER SEGMENTS . THE FOLLOWING SPECIFIC
ACCOUNTING POLICIES HAVE BEEN FOLLOWED FOR SEGMENT REPORTING : SEGMENT REVENUE
INCLUDES SERVICE INCOME AND OTHER INCOME DIRECTLY IDENTIFIABLE WITH / ALLOCABLE TO THE
SEGMENT. I NCOME / EXPENSE , WHICH RELATES TO THE COMPANY, AS A WHOLE AND NOT ALLOCABLE
TO INDIVIDUAL BUSINESS
SEGMENT IS INCLUDED IN “UN-ALLOCABLE CORPORATE INCOME/EXPENSE RESPECTIVELY ”.
EXPENSES THAT ARE DIRECTLY IDENTIFIABLE WITH / ALLOCABLE TO SEGMENTS ARE CONSIDERED FOR
DETERMINING SEGMENT RESULTS. SEGMENT ASSETS AND LIABILITIES INCLUDE THOSE DIRECTLY
IDENTIFIABLE WITH THE RESPECTIVE SEGMENTS . UNALLOWABLE CORPORATE ASSETS AND LIABILITIES
REPRESENT THE ASSETS AND LIABILITIES THAT RELATE TO THE COMPANY AS A WHOLE AND NOT
ALLOCABLE TO ANY SEGMENT.
. TELECOM SECTOR PROFILE
.1. BACKGROUND
54

55. 4.2. ADMINISTRATION AND CONTROL
4.4. ENTRY OF PRIVATE SECTOR
4.5. REGULATORY CONTROL
4.6. TELECOM POLICIES
4.7. CORPORATIZATION
4.8. OTHER GOVERNMENT ORGANIZATIONS UNDER TELECOM SECTOR
4.9. DISINVESTMENT OF PSUS
4.10 .FINANCIAL PERFORMANCE
4.11. FOREIGN DIRECT INVESTMENT
4.12. EMPLOYMENT GENERATION
55

56. 4.13. CONTRIBUTION OF THE PRIVATE AND PUBLIC SECTORS IN TELECOM NETWORK
4.14. WIRELESS IN LOCAL LOOP (MOBILE) SERVICE VS . CELLULAR MOBILE TELEPHONE SERVICE
4.15. THE PICTURE AHEAD
4.1. BACKGROUND
TELEPHONE SERVICES HAVE BEEN RECOGNIZED THE WORLD OVER AS AN IMPORTANT TOOL FOR
SOCIO - ECONOMIC DEVELOPMENT FOR A NATION AND HENCE TELECOM INFRASTRUCTURE IS REGARDED
AS A CRUCIAL FACTOR IN ACHIEVING THE SOCIO -ECONOMIC OBJECTIVES IN I NDIA . I NDIAN TELECOM IS
MORE THAN 160 YEARS OLD BEGINNING WITH COMMISSIONING OF THE FIRST TELEGRAPH LINE
BETWEEN KOLKATA AND DIAMOND HARBOUR IN 1839. IN 1948 INDIA HAD ONLY 0.1 MILLION
TELEPHONE CONNECTIONS WITH A TELEPHONE DENSITY OF ABOUT 0.02 TELEPHONES PER
HUNDRED POPULATIONS. SINCE THEN INDIA HAS COME A LONG WAY AND BY 31 AUGUST
2003 THERE WERE 45.6 MILLION TELEPHONE CONNECTIONS IN THE COUNTRY WITH A TELEPHONE
DENSITY OF 5.72 TELEPHONES PER HUNDRED POPULATION .
VARIOUS ADMINISTRATIVE AND FUNCTIONAL ASPECTS OF THE TELECOM SECTOR IN THE COUNTRY ARE
DISCUSSED BELOW :
4.2. ADMINISTRATION AND CONTROL
THE TELECOM COMMISSION, SET UP IN APRIL 1989 HAS THE ADMINISTRATIVE AND FINANCIAL
POWERS OF THE GOVERNMENT OF INDIA TO DEAL WITH VARIOUS ASPECTS OF
TELECOMMUNICATIONS . THE TELECOM COMMISSION AND THE DEPARTMENT OF
56

57. TELECOMMUNICATIONS (DOT) ARE RESPONSIBLE FOR POLICY FORMULATION, LICENSING , WIRELESS
SPECTRUM MANAGEMENT , ADMINISTRATIVE MONITORING OF PUBLIC SECTOR UNDERTAKINGS
(PSUS) ENGAGED IN TELECOMMUNICATION SERVICES , RESEARCH AND DEVELOPMENT AND
STANDARDIZATION / VALIDATION OF EQUIPMENT , ETC .
4.3. TELECOM REFORMS
TELECOM SERVICES AND MOST OF THE MANUFACTURING ACTIVITIES WERE TOTALLY UNDER
GOVERNMENT DOMAIN TILL TELECOM REFORMS BEGAN IN 1980S WITH THE LAUNCH OF A “MISSION
BETTER COMMUNICATION” PROGRAMME. PRIVATE MANUFACTURING OF EQUIPMENT FOR
CUSTOMERS ' USE WAS ALLOWED IN 1984 AND THE CENTRE FOR DEVELOPMENT OF TELEMETRIC
(C-DOT) WAS ESTABLISHED FOR THE DEVELOPMENT OF INDIGENOUS TECHNOLOGIES . TWO LARGE
CORPORATE ENTITIES WERE SPUN OFF FROM DOT NAMELY , MAHANAGAR TELEPHONE NIGAM
LIMITED (MTNL) IN FEBRUARY 1986 FOR DELHI AND MUMBAI AND VIDESH SANCHAR NIGAM
LIMITED (VSNL) IN MARCH 1986 FOR ALL INTERNATIONAL SERVICES . THIS BEGAN THE PROCESS
OF CORPORATIZATION OF SERVICES THAT HAD HITHERTO BEEN UNDER A GOVERNMENT DEPARTMENT .
4.4. ENTRY OF PRIVATE SECTOR
A PARADIGM SHIFT IN GOVERNMENT POLICY CAME IN THE EARLY NINETIES WHEN THE
TELECOMMUNICATION SECTOR WAS OPENED UP TO THE PRIVATE SECTOR . THE PROCESS OF ENTRY
OF PRIVATE OPERATORS IN PROVIDING TELECOMMUNICATION SERVICES IN INDIA COMMENCED IN
1992. APART
FROM PRIVATIZING BASIC TELEPHONE SERVICES GOVERNMENT ALSO DECIDED TO INTRODUCE A
NUMBER OF VALUE ADDED SERVICES THROUGH PRIVATE OPERATORS , SUCH AS CELLULAR MOBILE
TELEPHONES, RADIO PAGING , E -MAIL , INTERNET, CLOSED USER GROUPS (CUG), ETC ., WHICH ADD
TO THE VALUE OF THE EXISTING BASIC TELEPHONE SERVICES .
57

58. 4.5. REGULATORY CONTROL
ENTRY OF PRIVATE SERVICE PROVIDERS BROUGHT WITH IT THE INEVITABLE NEED FOR INDEPENDENT
REGULATION . TELECOM REGULATORY AUTHORITY OF I NDIA (TRAI) WAS THUS ESTABLISHED WITH
EFFECT FROM 20 FEBRUARY 1997 BY AN ACT OF PARLIAMENT CALLED TELECOM REGULATORY
AUTHORITY OF I NDIA ACT, 1997, TO REGULATE THE TELECOM SERVICES , INCLUDING
FIXATION / REVISION OF TARIFFS FOR TELECOM SERVICES WHICH WERE EARLIER VESTED IN THE
CENTRAL GOVERNMENT. THE TRAI ACT WAS AMENDED BY AN ORDINANCE EFFECTIVE FROM 24
JANUARY 2000 SEPARATING THE ADJUDICATORY AND DISPUTES FUNCTIONS FROM THE TRAI BY
ESTABLISHING A TELECOMMUNICATIONS DISPUTE SETTLEMENT AND APPELLATE TRIBUNAL
(TDSAT). TDSAT ADJUDICATES ANY DISPUTE BETWEEN A LICENSOR AND A LICENSEE , BETWEEN
TWO 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. A
BETTER MODEL WOULD HAVE BEEN TO PUT THE INDEPENDENT REGULATOR IN PLACE EARLY IN THE
NINETIES ALONG WITH THE OPENING UP OF SERVICES TO THE PRIVATE SECTOR .
KEEPING IN VIEW THE INCREASING CONVERGENCE OF TELECOM , COMPUTERS , TELEVISION AND
ELECTRONICS THE GOVERNMENT OF INDIA INTRODUCED THE COMMUNICATION CONVERGENCE BILL
2001 IN THE LOK SABHA ON 31 AUGUST 2001; THIS WAS THEREAFTER SENT TO THE
PARLIAMENTARY STANDING COMMITTEE ON COMMUNICATIONS AND INFORMATION TECHNOLOGY
WHICH HAS PRESENTED ITS REPORT TO THE PARLIAMENT IN NOVEMBER 2002 AND THE
OBSERVATIONS AND RECOMMENDATIONS MADE BY IT WERE UNDER CONSIDERATION . THE BILL AIMS
AT PROMOTING , FACILITATING AND DEVELOPING IN AN ORDERLY MANNER THE CARRIAGE AND
CONTENT OF COMMUNICATIONS (INCLUDING BROADCASTING , TELECOMMUNICATIONS AND MULTIMEDIA ),
IN VIEW OF THE NECESSITY TO FACILITATE DEVELOPMENT OF A NATIONAL INFRASTRUCTURE FOR AN
INFORMATION BASED SOCIETY , AND TO ENABLE ACCESS THERETO . I T ALSO SEEKS TO PROVIDE A
CHOICE OF SERVICES TO THE PEOPLE WITH A VIEW TO PROMOTING PLURALITY OF NEWS , VIEWS AND
INFORMATION . THIS REGULATORY AND LICENSING AUTHORITY WILL BE KNOWN AS THE
“COMMUNICATION COMMISSION OF I NDIA ”. THE LICENSING FUNCTION , PRESENTLY BEING HANDLED
BY DOT, WILL PASS ON TO THIS COMMISSION. HOWEVER, THE BILL IS YET TO BE PASSED .
4.6 TELECOM POLICIES
THE FIRST NATIONAL TELECOM POLICY WAS ANNOUNCED IN 1994, WITH A MAJOR THRUST ON
58

59. UNIVERSAL SERVICE AND QUALITATIVE IMPROVEMENT IN TELECOM SERVICES AND ALSO, OPENING OF
PRIVATE SECTOR PARTICIPATION IN BASIC TELEPHONE SERVICES . I N THE INITIAL ENTHUSIASM OF
OPENING UP OF THE TELECOMMUNICATIONS SECTOR , THE PRIVATE OPERATORS , IN THEIR BIDS ,
OFFERED MUCH HIGHER AMOUNTS OF LICENCE FEE THAN THEY COULD EVENTUALLY MUSTER. AS A
RESULT BY MAY 1999, THEY HAD ACCUMULATED ARREARS TOTALING RS 3779.45 CRORE
PAYABLE TO GOVERNMENT. A MAJOR LANDMARK IN THE TELECOM SECTOR CAME WITH THE NEW
TELECOM POLICY 1999 (NTP-99) WHICH ALLOWED PRIVATE OPERATORS TO MIGRATE FROM FIXED
LICENSE FEE REGIME TO A REVENUE SHARING REGIME . OTHER PROVISIONS IN NTP-99 WERE TO
PERMIT INTERCONNECTIVITY AND SHARING OF INFRASTRUCTURE AMONG VARIOUS SERVICE PROVIDERS
WITHIN THE SAME AREAS OF OPERATIONS , SEPARATION OF POLICY AND LICENSING FUNCTIONS OF
DOT FROM THE SERVICE PROVISION FUNCTION , OPENING OF NATIONAL LONG DISTANCE SERVICES TO
COMPETITION AND CARRYING OF BOTH VOICE AND DATA TRAFFIC BY SERVICE PROVIDERS . AS OF 31
MARCH 2003, UNRESTRICTED ENTRY HAS BEEN ALLOWED IN BASIC SERVICES ON REVENUE SHARING
BASIS , ALL TELECOM SERVICES HAVE BEEN OPENED UP FOR PRIVATE SECTOR PARTICIPATION ,
NATIONAL AND INTERNATIONAL DATA CONNECTIVITY HAS BEEN OPENED TO ALL AND INTERNET
SERVICES HAVE ALSO BEEN OPENED UP WITHOUT ANY RESTRICTION ON THE NUMBER OF ENTRANTS
AND WITHOUT ANY ENTRY FEE. NATIONAL FREQUENCY ALLOCATION PLAN (NFAP-2002) HAS BEEN
EVOLVED IN LINE WITH THE RADIO REGULATIONS OF THE INTERNATIONAL TELECOM UNION (ITU)
FOR CATERING TO THE CONFLICTING DEMAND ON SPECTRUM .
4.7. CORPORATIZATION
AS A PART OF THE CONTINUING PROCESS OF OPENING UP OF THE SECTOR , AND IN PURSUANCE OF
NTP-99, DEPARTMENT OF TELECOM SERVICES (DTS) WAS CARVED OUT FROM DOT IN
OCTOBER 1999 FOR PROVIDING TELECOMMUNICATIONS SERVICES IN THE COUNTRY . SUBSEQUENTLY
IN JULY 2000, DTS WAS BIFURCATED AND A NEW DEPARTMENT KNOWN AS THE DEPARTMENT OF
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60. TELECOM OPERATIONS (DTO) WAS CREATED. DTS AND DTO WERE FINALLY CORPORATIZED
INTO A WHOLLY OWNED GOVERNMENT COMPANY NAMELY BHARAT SANCHAR NIGAM LIMITED
(BSNL) (INCORPORATED ON 15 SEPTEMBER 2000) AND THEIR BUSINESS OF PROVIDING TELECOM
SERVICES IN THE COUNTRY WAS TRANSFERRED TO THIS COMPANY WITH EFFECT FROM 1 OCTOBER
2000. THE CREATION OF BSNL IS EXPECTED TO PROVIDE A LEVEL PLAYING FIELD IN ALL AREAS
OF 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 SECTOR
UNDERTAKINGS UNDER TELECOM SECTOR WERE ITI LIMITED (ITI), HINDUSTAN TELEPRINTERS
LIMITED (HTL), TELECOMMUNICATIONS CONSULTANTS INDIA LIMITED (TCIL), INTELLIGENT
COMMUNICATION SYSTEMS INDIA LIMITED (ICSIL) AND MILLENNIUM TELECOM LIMITED (MTL).
ITI LIMITED WAS FORMED IN 1948 FOR MANUFACTURING A WIDE RANGE OF EQUIPMENT , WHICH
INCLUDES ELECTRONIC SWITCHING EQUIPMENT, TRANSMISSION EQUIPMENT AND TELEPHONE
INSTRUMENTS OF VARIOUS TYPES . HTL WAS ESTABLISHED IN DECEMBER 1960 FOR MANUFACTURE
OF TELEPRINTERS AND ANCILLARY EQUIPMENT. TCIL WAS ESTABLISHED IN 1978 FOR PROVIDING
KNOW - HOW IN ALL THE FIELDS OF TELECOMMUNICATIONS AT GLOBAL LEVEL. THE CORE COMPETENCE
OF TCIL IS IN COMMUNICATIONS NETWORK PROJECTS , SOFTWARE SUPPORT , SWITCHING AND
TRANSMISSION SYSTEMS , CELLULAR SERVICES , RURAL TELECOMMUNICATIONS AND OPTICAL FIBER
BASED BACKBONE NETWORK . ICSIL WAS ESTABLISHED IN APRIL 1987 FOR MANUFACTURING
COMPUTER BASED COMMUNICATION SYSTEMS AND EQUIPMENT. I T ALSO PROVIDES ENGINEERING ,
TECHNICAL AND MANAGEMENT CONSULTANCY SERVICES FOR COMPUTERS AND COMMUNICATIONS
SYSTEMS IN I NDIA AND ABROAD . MTL WAS ESTABLISHED IN FEBRUARY 2000 AS A WHOLLY OWNED
SUBSIDIARY OF MTNL FOR PROVISIONING OF I NTERNET SERVICES IN THE COUNTRY . I T IS PURSUING
ESTABLISHMENT OF BROADBAND INTERNET ACCESS FOR THE CORPORATE SEGMENT AND VOICE
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61. OVER INTERNET PROTOCOL (VOIP) TELEPHONY SERVICES THROUGHOUT I NDIA WITH USE OF
RELEVANT TECHNOLOGIES LIKE VSATS ETC.
IN ADDITION TO C-DOT AND TELECOM COMMISSION, OTHER GOVERNMENT ORGANIZATIONS
ENGAGED IN THE TELECOM SECTOR (AS A PART OF DOT) WERE TELECOM ENGINEERING CENTRE
(TEC) AND THE WIRELESS PLANNING AND COORDINATION (WPC) WING . C-DOT WAS
ESTABLISHED IN 1984 WITH THE OBJECTIVE OF DEVELOPING A NEW GENERATION OF DIGITAL
SWITCHING ITEMS . C-DOT HAS DEVELOPED A WIDE RANGE OF SWITCHING AND TRANSMISSION
PRODUCTS BOTH FOR THE RURAL AND URBAN APPLICATIONS . TEC IS AN INSTITUTION , WHICH WORKS
AS A PART OF DOT AND IS DEVOTED TO PRODUCT VALIDATION AND STANDARDIZATION FOR THE USER
AGENCIES . I T ALSO PROVIDES TECHNICAL AND ENGINEERING SUPPORT TO TELECOM COMMISSION
AND FIELD UNITS . WPC IS A WING OF DOT THAT DEALS WITH THE POLICY OF SPECTRUM
MANAGEMENT, LICENSING , FREQUENCY ASSIGNMENTS , INTERNATIONAL COORDINATION FOR SPECTRUM
MANAGEMENT AND ADMINISTRATION OF THE INDIAN WIRELESS TELEGRAPH ACT 1933.
4.9. DISINVESTMENT OF PSUS
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62. GOVERNMENT HAS DISINVESTED ITS MAJOR SHAREHOLDING IN HTL
DURING OCTOBER 2001 AND IN VSNL DURING FEBRUARY 2002 AND
SINCE THEN THESE UNDERTAKINGS HAS CEASED TO BE GOVERNMENT OWNED
PSUS.
4.10. FINANCIAL PERFORMANCE
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63. TELECOM LANDSCAPE IN I NDIA HAS CHANGED COMPLETELY SINCE LIBERALIZATION AND MONOPOLIES
IN TELECOM SECTOR HAVE BEEN REPLACED WITH COMPETITIVE REGIME (OLIGOPOLIES). IT IS A
WELL- KNOWN FACT THAT BSNL WAS CARVED OUT OF ERSTWHILE DOT TO PROVIDE LEVEL PLAYING
FIELD TO PRIVATE TELECOMS. SINCE THEN MANY NEW BUSINESS FIRMS HAVE ENTERED IN THE
ARENA AND TODAY THERE IS MERCILESS CUTTHROAT COMPETITION IN THIS SECTOR . EVEN THOUGH
COMPETITION IS BONANZA FOR SUBSCRIBERS BUT FOR CORPORATES IT IS THE QUESTION OF
SURVIVABILITY . I F THEY ARE NOT IN A POSITION TO EARN SUFFICIENT REVENUE FROM THE
OPERATIONS WHICH NOT ONLY MEETS THEIR GROWTH AND EXPANSION PLANS BUT ARE NECESSARY
FOR PAYING ALL GOVERNMENT LEVIES AND DUES AS REVENUE SHARE, SPECTRUM CHARGES , USO
FUND CONTRIBUTION ETC . AS WELL AS MEETING INTERNAL REQUIREMENTS LIKE OPERATION AND
ADMINISTRATION EXPENDITURES , STAFF COSTS , I NTEREST AND REPAYMENT OF DEBT ETC .
CORPORATES ARE ALSO UNDER TREMENDOUS PRESSURE FROM INVESTORS TO SHOW BETTER
RESULTS SO THAT THEY ALSO GET HANDSOME RETURNS ON THEIR INVESTMENTS IN THE FORM OF
DIVIDENDS OR APPRECIATION IN SHARE VALUES . TO MEET ALL SUCH REQUIREMENTS CORPORATE
MANAGEMENT SOME TIME INDULGES INTO CREATIVE ACCOUNTING TO ARTIFICIAL BOOST THE PROFIT
FIGURES BECAUSE AT THE END OF DAY IT IS THE PROFIT , WHICH MATTERS MOST TOO ANY
BUSINESS ORGANIZATION IF IT IS NOT A NON -PROFIT ORGANIZATION . THERE IS MANDATORY
REQUIREMENT FOR ALL COMPANIES TO FILE FOLLOWING THREE AUDITED STATEMENTS TO COMPANY
LAW BOARD AT THE CLOSURE OF EVERY FINANCIAL YEAR I.E. BALANCE SHEET AS ON THE LAST
DAY OF FINANCIAL YEAR , PROFIT AND LOSS ACCOUNT FOR THE WHOLE ACCOUNTING YEAR AND CASH
FLOW STATEMENT . FOR STAKE HOLDERS AND INVESTORS IT BECOMES NECESSARY TO LOOK BEYOND
THE FIGURES QUOTED IN THESE STATEMENTS AND CARRY OUT THE IN DEPTH FINANCIAL ANALYSIS TO
TAKE APPROPRIATE DECISION REGARDING THEIR INVESTMENT AND OTHER IMPORTANT DECISIONS . I N
RESPECT OF BSNL ANALYSIS CARRIED OUT IS BASED ON ITS AUDITED BALANCE SHEET AND
PROFIT AND LOSS ACCOUNTS TAKEN FROM ITS ANNUAL REPORTS .
ROLE OF COMMUNICATION SERVICES IN NATIONAL GROWTH :
PROPORTION OF COMMUNICATION SERVICES IN GDP IS INCREASING AT FASTER RATE , AS IT IS
EVIDENT FROM THE FOLLOWING TABLE.
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