Rajeev Chandrasekhar's official website - Member of Parliament

GOVERNMENT OF INDIA
Ministry of Communications and Information Technology
DEPARTMENT OF TELECOMMUNICATIONS 

RAJYA SABHA
UNSTARRED QUESTION NO. 1603
ANSWERED ON DECEMBER 7, 2012 

QUESTION
Implementation of Recommendations of Sam Pitroda Committee on Bharat Sanchar Nigam Limited (BSNL)

1603. SHRI RAJEEV CHANDRASEKHAR: 

Will the Minister of COMMUNICATIONS AND INFORMATION TECHNOLOGY be pleased to state: 

(a)   whether recommendations of the Sam Pitroda Committee, set up consequent upon letter of an MP to the Hon'ble Prime Minister dated 10 December, 2009 outlining therein suggestions to address the alarming and deteriorating financial situation of BSNL and to curb its decline, have been implemented; 

(b)   if so, the details thereof; and 

(c)    the details of the performance of BSNL since the implementation of these recommendations? 

 

ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF
COMMUNICATIONS AND INFORMATION TECHNOLOGY
(SHRI MILIND DEORA) 

(a) & (b) The Government had set up a Committee under Sam Pitroda to review the functioning of Bharat Sanchar Nigam Limited (BSNL). The important recommendations of the Sam Pitroda Committee were as follows:

  • Focus on selection of the best professionals from the market at market rates.
  • Appoint an eminent person from the private sector as the Chairman.
  • Separate the post of the Managing Director/ CEO (from CMD).
  • Change the Board composition to seven directors {one internal (MD/CEO), one nonexecutive chairman, two government nominee and three external directors}.
  • Provide three year contracts with specific targets for all key management team members.
  • Establish four independent business units for Fixed access, Mobility, Enterprise and New businesses.
  • Complete ITS (Indian Telecom Service) absorption process.
  • Induct significant young talent in Technology, IT, marketing, sales, etc.
  • Retire or transfer around 100K employees through processes like VRS (Voluntary Retirement Scheme).
  • Change procurement processes and procedures substantially using tools such as e-Procurement, vendor rating, rate running contracts, schedules, etc.
  • Disinvest 30% through Indian strategic investor and at Initial Public Offering (IPO) to return 10% to the government and use 20% for employee VRS, expansion and operation.
  • Provide 30 million new high speed broadband connections in the next three years.
  • Unbundle local loop for public and private companies.
  • Proactively offer sharing of active and passive infrastructure to other operators.
  • Enhance rural communication facilities by connecting 250,000 panchayats.
  • Create a separate subsidiary company for tower related infrastructure.
  • Create a separate subsidiary to hold land bank and other real estate assets.
  • Establish a BSNL venture fund to invest and/or acquire small appropriate technology companies.

 

Telecom Commission deliberated on the recommendations of the Sam Pitroda Committee on improving the performance of the BSNL in its meeting held on 7.7.2010. The Telecom Commission decided to constitute 'Internal Committee' under the Chairmanship of Member (Services), Department of Telecommunications to give its recommendations on the report. Accordingly on 19.08.2010, a Committee under the Chairmanship of Member (Services) was constituted. 

The internal committee submitted its report on 29.10.2010, which was discussed again in Telecom Commission in its meeting, held on 30.11.2010. Telecom Commission has decided the following in the matter:

(i)     Taking 30-50 professional from market at market rates changing Board Constitution or separating Chairman and MD posts may not be feasible in only one Public Sector Undertaking (PSU) as it may trigger protest from BSNL and demand for similar treatment by other PSUs.

(ii)   This is not the opportune time for listing & disinvestment of BSNL, as company is on downward performance path & disinvestment may not realize true value of the company. In absence of listing, option of giving stocks as incentive, to key management is not available for the present.

(iii) VRS across the board may not be required; BSNL could examine option of VRS for select categories, examining financial burden and cost/benefit of the company.

(iv)  On adopting Managed capacity or managed services model - Internal Committee view that the Board of BSNL may take a view is endorsed.

(v)    Unbundling of the local loop is a commercial decision, which shall be decided by BSNL Board after critically examining the issue.

(vi)  All other issues are operational and commercial issues of BNSL for which the Board is competent to take decisions.

The Commission also observed that some of the above issues including items (ii), (iii) and (v) could be revisited if the need arose in the context of any major policy decisions involving restructuring and repositioning of BSNL.

(c) The financial performance and subscriber base of BSNL during the last three years is as follows:

Financial Performance

Financial Year

Income (Crores)

Expenditure (Crores)

Profit/Loss (Rs. In (Crores) BSNL

 

2009-10

32045

34243

(-) 1823

2010-11

29688

36266

(-) 6384

2011-12

27934

36586

(-)8851

 

Subscriber base 

As on

Mobile

(in million)

Wireline

(in million)

Broadband

(in million)

31.3.2010

69.45

27.83

5.38

31.3.2011

91.83

25.22

7.62

31.3.2012

94.50

22.47

9.05

30.9.2012

96.51

21.36

9.58