The Hindu Business Line : BSNL wants urban losses made good — Seeks to access universal service fund

TELECOM major Bharat Sanchar Nigam Ltd (BSNL) has sought compensation from the Department of Telecommunications (DoT) for its urban uneconomic services, estimated at close to Rs 7,000 crore per annum, which at present fall outside the purview of the universal service fund (USF).

According to official sources, the company has asked the DoT to review its guidelines on universal service obligations (USO) to enable it to dip into the fund, which has been set up to cater only to the rural uneconomic services of telecom companies.

The department has been told that the present guidelines will create a financial burden on BSNL, which carries a huge legacy network with more than 52 per cent of its urban customers being uneconomic. Not only is the company saddled with the existing uneconomic connections, but also as a public sector unit it is not in a position to avoid uneconomic urban customers from joining.

On the other hand, its competitors in the private sector can adopt selective policies for provision of connections to uneconomic urban customers by applying certain yardsticks, including the level of monthly billing of the potential customer.

``BSNL does not adopt such discriminatory practices. Hence it is the most affected by the exclusion of urban economic customers from the ambit of USO funding. As the pressure on resources increases and if there is no USO support for these services, it may be forced to divert some of these connections to more economic customers as a commercial policy. Hence DoT has been asked to reconsider the exclusion of urban uneconomic connections from USO support,'' the sources noted.

The company also sought clarifications from DoT for excluding this year's programme of village public telephones (VPTs) from the USO funding.

As per DoT guidelines, for installation of VPTs in the 6,07,491 villages, identified as per 1991 census which are required to be covered by December 31, no reimbursement towards capital recovery shall be admissible and given.

BSNL pointed out that such exclusion did not appear to be based on the new telecom policy (NTP'99). BSNL has already provided VPTs in 4.99 lakh villages without the compulsion of any commitment under a licence agreement.

Most of these have been provided in the last 3-4 years after competition and TRAI's tariff rebalancing exercise started eroding BSNL's revenues.

Now six lakh lines of WLL equipment have been purchased for this purpose and around one lakh villages are to be provided with telephone facilities using WLL.

Around 89,000 villages are already covered and the remaining will be covered on WLL in the next four months. Funds should be made available for BSNL for this equipment, which is in an advanced stage of implementation. Long distance telephony has also been opened to competition and its impact is going to be considerable.

At least this year's programme for VPTs should not be excluded form the ambit of USO funding, it said.

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