MTNL, BSNL in dismal state, says Centre

Puncturing the Central government's claim that the two public sector enterprises, the MTNL and BSNL posted a profit of Rs 7,825 crore, a parliamentary panel that scrutinised the allocations of telecommunication ministry highlighted the dismal financial performance of both the enterprises. The panel headed by BJP MP Bhagat Singh Koshyari found that the one-time profit as being quoted too often by the ministers was actually government support in the form of a write-back of provisions for pension liabilities and spectrum amortisation costs.

The MPs said while they accepted the contention of MTNL and BSNL officials that their dismal performance was on account of growing competition, decreasing tariffs as a results thereof, significant spectrum related payouts, high burden on employees remuneration, yet these factors were not cogent reasons for existing pitiable conditions of these commercial entities.

As a long term revival plan, the parliamentary committee also recommended merger of both the enterprises to give them a chance to compete against the emerging consolidated private sector players. The MPs were amazed that while private operators in telecommunication were doing a roaring business, these two government entities were going down day by day.