This post has been self-published on Youth Ki Awaaz by IndiaSpend. Just like them, anyone can publish on Youth Ki Awaaz.

The Golden Goose That The Government Killed: BSNL, Is It Really ‘Connecting People’?

More from IndiaSpend

By Gangadhar S Patil,

Once India’s leading telecommunication giant and among its most profitable state-run companies, Bharat Sanchar Nigam Limited (BSNL) has posted a loss for the fifth straight financial year.

BSNL lost Rs 3,785 crore during 2014-15, according to provisional data released by the government. The accumulated loss of BSNL has now swelled to about Rs 36,000 crore ($6 billion), with the company making losses since 2009-10.

Source: Department of Public Enterprises
BSNL accounts for 35% of the Rs 20,000-crore loss shown by 71 PSUs in 2013-14. If BSNL’s losses can be stemmed, the Indian government will have more money to spend.

BSNL’s fortunes declined dramatically because its subscribers moved from landlines to mobile phones (as IndiaSpend reported earlier), and it spent increasing sums of money on salaries for its 2.38 lakh employees, Minister of Communications and Information Technology Ravi Shankar Prasad told Parliament in December 2014.

However, a closer look at the data and events in the telecom industry over the last decade reveals how government policies killed its golden goose. The decline in revenue was not foregone but a result of the government’s gradual whittling of promised subsidies, while keeping the company’s ‘social obligations’ intact.

Those obligations included expanding a rural landline network that recovered barely a tenth of its costs, compulsory purchase of 3G spectrum–or telecom bandwidth–and bureaucratic delays in buying equipment.

Despite repeated reminders over 10 days, BSNL did not respond to IndiaSpend’s questions, emailed to Chairman and Managing Director Anupam Shrivastava.

Let’s examine four reasons that led to BSNL’s decline:

1) Rural landline networks: Big push at big loss

After 2002, as the mobile-phone revolution spread, BSNL’s landline subscriber-base fell from 33.7 million in 2006-07 to 16 million in 2014-15, according to telecom ministry data compiled from the Parliament website.

Source: Rajya Sabha
In 2013-14, the landline division posted a loss of Rs 14,979 crore.

Source: Rajya Sabha
The government says subscribers giving up landlines was a major blow, and it was, but the expansion of a rural network that was already making losses was equally responsible.

On an average, BSNL was spending Rs 702 per line per month on rural landline services against a revenue of about Rs 78 per line per month, according to the 2008-09 audited accounts of BSNL.

BSNL was tasked with building, expanding and running the rural network at minimal tariffs as part of its social obligation, said P Abhimanyu, General Secretary of BSNL employees union. In 2003-04, the PSU reported a loss of about Rs 9,528 crore in the rural landline segment.

Of 593,601 inhabited villages in the country, according to Census 2001, BSNL had installed public telephones in 586, 000 of them by December 2014.

Since returns are low, private telecom operators ignore village landline networks, providing no more than 2% of connections in 2010.

Source: Annual Reports of BSNL
2) Withdrawal of subsidies after being pushed into ‘social obligations’

In view of the ‘immense rural and social obligations’, as the telecom policy of 1999 described it, the government promised to exempt BSNL from license fees and spectrum charges. The government reneged on that promise in 2006-07, according to this Economic Times report.

Between 2001-02 and 2003-04, BSNL was reimbursed licence fees and spectrum charges. That fell to 2/3rd and 1/3rd, before ending in 2006-07.

BSNL lost Rs 3000 crore every year since. More was to follow.

Source: Annual Reports of BSNL
To fund rural landline services, the Telecom Regulatory Authority of India (TRAI), in January 2003, imposed an ‘access deficit charges’ (ADC) on all operators to fund subsidies for existing rural telephones.

In 2003-04, the ADC subsidy was estimated at Rs 13,000 crore annually, most (around Rs 10,800 crore) for BSNL, which operated 95 per cent of India’s rural telephones. That year, TRAI reduced this amount to Rs 5,200 crore, paring it further to Rs 3,000 crore in 2006-07 and to Rs 2,000 crore in 2007-08.

Eventually, the government scrapped the subsidy in 2008, arguing that BSNL received financial assistance in various forms.

The ADC was temporary because it would not have been fair to ask private companies to fund it, said Mahesh Uppal, a Delhi-based telecom consultant. Instead, the government promised Rs 2,000 crore every year from the Universal Service Obligation (USO) fund, created by imposing a levy of 5% on the revenue all telecom operators. It did not last: Rs 1,250 crore from the USO fund for 2012-13 to BSNL is still pending.

Source: Rajya Sabha
BSNL had invested about Rs 25,000 crore in its rural network and before it could recover this money, the ADC was ‘arbitrarily withdrawn,’ said GL Jogi, a senior official with BSNL and General Secretary of Sanchar Nigam Executive Association.

Against a loss of almost Rs 10,000 crore a year to meet social obligations, the government paid no more than Rs 1,500 crore to BSNL from in 2011-12.

3) Compulsory purchase of 3G spectrum at government-mandated prices

In 2010, when private telecom companies purchased spectrum, they bid only for areas–or circles, in official parlance–that were expected to turn profits.

BSNL had no such choice.

The then telecom minister Kapil Sibal said BSNL was obliged to purchase pan-India broadband wireless access and 3G (third-generation) spectrum (excluding Delhi and Mumbai) for Rs 8,318 crore and Rs 10,187 crore respectively, according to this Business Standard report.

BSNL was allocated infeasible and cost-intensive spectrum in the higher frequency range (2.6GHz) against lower-frequency radio waves (2.3GHz) given to private players,” said Abhimanyu, a senior employee with BSNL. “Lower frequency means better services and less capital expense on infrastructure.”

The government has finally accepted concerns raised by BSNL and in September 2013 it agreed to refund broadband wireless access and spectrum money, according to this report in the Hindu.

Since BSNL was not allowed to bid, it was unfair to make the company buy expensive assets it could not use, said Uppal.

BSNL paid Rs 18,000 crore for broadband wireless access and 3G spectrum in 2010, while Bharti, Vodafone, Aircel and other operators paid between Rs 2,000 and 6,000 crore, reported The Economic Times.

That Rs 18,000 crore decimated BSNL’s cash reserves, from Rs 29,300 crore to Rs 1,700 crore, according to data presented in Parliament.

With low cash reserves and growing financial distress, BSNL’s operations faltered, and nearly 800,000 mobile subscribers switched to other operators; its market share declined from 16% to 10%.

Source: TRAI
4) How the government fiddled with tenders and orders

When BSNL’s fortunes were at a peak in 2006, its expansion plans were delayed by interference from the United Progressive Alliance government.

In 2006, a tender for 45.5 million mobile lines was delayed for more than six months; eventually, after a year, then telecom minister A Raja (arrested in February 2011 for the 2G Spectrum Scam), reduced the tender size to 14 million, according to this report.

Two years later, in 2008, another tender of 93.3 million mobile lines ran into controversy after Nokia Siemens got disqualified on technical grounds leaving only Ericsson in the fray, and it was cancelled in March 2010. Between 2005 and 2008, BSNL’s market share dropped from 38% to 25% after a delay in equipment purchases.

Source: TRAI

Does India Really Need BSNL?

India really does need BSNL, its employees argue.

BSNL forces private operators to reduce their prices, said Rakesh Sethi, General Secretary of All India BSNL officers’ association. “From free incoming calls, one-rupee one-India plan to the recently launched free-roaming scheme, BSNL has been leading the market,” said Sethi.

BSNL is also important to ensure e-governance projects reach rural India. “It is only BSNL that has reached most of the villages and continues to expand its network in rural areas,” said Jogi.

Most private companies have not taken mobile services to rural areas (each company is supposed to serve 21,600 tower sites in villages), Business Line reported.

BSNL also works in strategically important but likely unprofitable national projects, such as the National Optic Fibre Network, Network for Spectrum for defence and the Left Wing Extremist for areas dominated by India’s Maoist insurgency.

Should BSNL be privatised? “Instead of privatising it,” said Uppal, the telecom consultant, “the government should look for a strategic partnership with any private organisation with a proven track record.”

Patil is a New Delhi-based freelance journalist. He has worked with The Economic Times, DNA and The New Indian Express.

This article was originally published on, a data-driven and public-interest journalism non-profit.

You must be to comment.
  1. B Raghav

    You have exclusively narrated the reasons for the downfall of BSNL. This should be an eye opener for the Government to bring out this PSU from further fall. The main reasons for withdrawal of various incentives provided to BSNL is the handwork of ITS officers in DOT in connivance with the unabsorbed ITS officers who captain important divisions in BSNL. This can be corroborated with the formation of BBNL, where the ITS officers find shelter after spoiling future of BSNL. Now BSNL has another Government competetor i.e. BBNL to whom Government extends full support. What was the need for BBNL? Now BSNL is not a milching cow for politicians and ITS officers, then why they should support BSNL? Now let us see what MoC do to revive BSNL.

  2. pradeep

    BSNL is a classic example of how a well managed Govt. Department was split to suit the interests of a few. ITS lobby in BSNL is pocketing pay & perks of Corporate World while enjoying shelter of Govt. Department/Ministry. They are managers without accountability. Govt. policies are also discouraging. Rural telephony is not a big reason of BSNL losses. The rural subscribers are paying even without the quality service. On the other hand MPs etc. given free connections owe lacs to BSNL as beyond limit consumption. Maintenance of service/cable is poor as need for communication gets least priority.

More from IndiaSpend

Similar Posts

By Shaharyar Khan

By shakeel ahmad

By Aayushi Naik

Wondering what to write about?

Here are some topics to get you started

Share your details to download the report.

We promise not to spam or send irrelevant information.

Share your details to download the report.

We promise not to spam or send irrelevant information.

An ambassador and trained facilitator under Eco Femme (a social enterprise working towards menstrual health in south India), Sanjina is also an active member of the MHM Collective- India and Menstrual Health Alliance- India. She has conducted Menstrual Health sessions in multiple government schools adopted by Rotary District 3240 as part of their WinS project in rural Bengal. She has also delivered training of trainers on SRHR, gender, sexuality and Menstruation for Tomorrow’s Foundation, Vikramshila Education Resource Society, Nirdhan trust and Micro Finance, Tollygunj Women In Need, Paint It Red in Kolkata.

Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

Saurabh has been associated with YKA as a user and has consistently been writing on the issue MHM and its intersectionality with other issues in the society. Now as an MHM Fellow with YKA, he’s launched the Right to Period campaign, which aims to ensure proper execution of MHM guidelines in Delhi’s schools.

The long-term aim of the campaign is to develop an open culture where menstruation is not treated as a taboo. The campaign also seeks to hold the schools accountable for their responsibilities as an important component in the implementation of MHM policies by making adequate sanitation infrastructure and knowledge of MHM available in school premises.

Read more about his campaign.

Harshita is a psychologist and works to support people with mental health issues, particularly adolescents who are survivors of violence. Associated with the Azadi Foundation in UP, Harshita became an MHM Fellow with YKA, with the aim of promoting better menstrual health.

Her campaign #MeriMarzi aims to promote menstrual health and wellness, hygiene and facilities for female sex workers in UP. She says, “Knowledge about natural body processes is a very basic human right. And for individuals whose occupation is providing sexual services, it becomes even more important.”

Meri Marzi aims to ensure sensitised, non-discriminatory health workers for the needs of female sex workers in the Suraksha Clinics under the UPSACS (Uttar Pradesh State AIDS Control Society) program by creating more dialogues and garnering public support for the cause of sex workers’ menstrual rights. The campaign will also ensure interventions with sex workers to clear misconceptions around overall hygiene management to ensure that results flow both ways.

Read more about her campaign.

MH Fellow Sabna comes with significant experience working with a range of development issues. A co-founder of Project Sakhi Saheli, which aims to combat period poverty and break menstrual taboos, Sabna has, in the past, worked on the issue of menstruation in urban slums of Delhi with women and adolescent girls. She and her team also released MenstraBook, with menstrastories and organised Menstra Tlk in the Delhi School of Social Work to create more conversations on menstruation.

With YKA MHM Fellow Vineet, Sabna launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society. As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Read more about her campaign. 

A student from Delhi School of Social work, Vineet is a part of Project Sakhi Saheli, an initiative by the students of Delhi school of Social Work to create awareness on Menstrual Health and combat Period Poverty. Along with MHM Action Fellow Sabna, Vineet launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society.

As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Find out more about the campaign here.

A native of Bhagalpur district – Bihar, Shalini Jha believes in equal rights for all genders and wants to work for a gender-equal and just society. In the past she’s had a year-long association as a community leader with Haiyya: Organise for Action’s Health Over Stigma campaign. She’s pursuing a Master’s in Literature with Ambedkar University, Delhi and as an MHM Fellow with YKA, recently launched ‘Project अल्हड़ (Alharh)’.

She says, “Bihar is ranked the lowest in India’s SDG Index 2019 for India. Hygienic and comfortable menstruation is a basic human right and sustainable development cannot be ensured if menstruators are deprived of their basic rights.” Project अल्हड़ (Alharh) aims to create a robust sensitised community in Bhagalpur to collectively spread awareness, break the taboo, debunk myths and initiate fearless conversations around menstruation. The campaign aims to reach at least 6000 adolescent girls from government and private schools in Baghalpur district in 2020.

Read more about the campaign here.

A psychologist and co-founder of a mental health NGO called Customize Cognition, Ritika forayed into the space of menstrual health and hygiene, sexual and reproductive healthcare and rights and gender equality as an MHM Fellow with YKA. She says, “The experience of working on MHM/SRHR and gender equality has been an enriching and eye-opening experience. I have learned what’s beneath the surface of the issue, be it awareness, lack of resources or disregard for trans men, who also menstruate.”

The Transmen-ses campaign aims to tackle the issue of silence and disregard for trans men’s menstruation needs, by mobilising gender sensitive health professionals and gender neutral restrooms in Lucknow.

Read more about the campaign here.

A Computer Science engineer by education, Nitisha started her career in the corporate sector, before realising she wanted to work in the development and social justice space. Since then, she has worked with Teach For India and Care India and is from the founding batch of Indian School of Development Management (ISDM), a one of its kind organisation creating leaders for the development sector through its experiential learning post graduate program.

As a Youth Ki Awaaz Menstrual Health Fellow, Nitisha has started Let’s Talk Period, a campaign to mobilise young people to switch to sustainable period products. She says, “80 lakh women in Delhi use non-biodegradable sanitary products, generate 3000 tonnes of menstrual waste, that takes 500-800 years to decompose; which in turn contributes to the health issues of all menstruators, increased burden of waste management on the city and harmful living environment for all citizens.

Let’s Talk Period aims to change this by

Find out more about her campaign here.

Share your details to download the report.

We promise not to spam or send irrelevant information.

A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

A Gender Rights Activist working with the tribal and marginalized communities in india, Srilekha is a PhD scholar working on understanding body and sexuality among tribal girls, to fill the gaps in research around indigenous women and their stories. Srilekha has worked extensively at the grassroots level with community based organisations, through several advocacy initiatives around Gender, Mental Health, Menstrual Hygiene and Sexual and Reproductive Health Rights (SRHR) for the indigenous in Jharkhand, over the last 6 years.

Srilekha has also contributed to sustainable livelihood projects and legal aid programs for survivors of sex trafficking. She has been conducting research based programs on maternal health, mental health, gender based violence, sex and sexuality. Her interest lies in conducting workshops for young people on life skills, feminism, gender and sexuality, trauma, resilience and interpersonal relationships.

A Guwahati-based college student pursuing her Masters in Tata Institute of Social Sciences, Bidisha started the #BleedwithDignity campaign on the technology platform, demanding that the Government of Assam install
biodegradable sanitary pad vending machines in all government schools across the state. Her petition on has already gathered support from over 90000 people and continues to grow.

Bidisha was selected in’s flagship program ‘She Creates Change’ having run successful online advocacy
campaigns, which were widely recognised. Through the #BleedwithDignity campaign; she organised and celebrated World Menstrual Hygiene Day, 2019 in Guwahati, Assam by hosting a wall mural by collaborating with local organisations. The initiative was widely covered by national and local media, and the mural was later inaugurated by the event’s chief guest Commissioner of Guwahati Municipal Corporation (GMC) Debeswar Malakar, IAS.

Sign up for the Youth Ki Awaaz Prime Ministerial Brief below