BSNL has written to the Communications Ministry requesting a compensation of Rs.15,873 crore per annum from the USO Fund for its initiatives in the rural areas which currently is being operated for a loss by the company.

In a letter to the Telecom Secretary, P J Thomas, BSNL CMD Kuldeep Goyal said that the company is incurring a loss of Rs.15,873 crore per annum for offering basic as well as telegraph services in rural areas. "It is therefore once again requested that BSNL may kindly be compensated for these losses of Rs 15,873 crore per annum by providing support from USO Fund to the maximum possible extent and rest by exempting BSNL from making payment towards licence fee, spectrum charges and USO Fund," said the CMD.

BSNL’s demand stems from the fact that  it offers mobile services in the rural areas for a minimal tariff. According to BSNL, its loss arising from offering basic services alone amounts to Rs.10,985 crore.

While the DoT has made a provision of Rs.2,000 crore per annum from the USOF for three years as financial support for BSNL’s basic services, the PSU feels that it is quite ‘inadequate.’ BSNL reasons that the rental revenue from rural basic lines is about Rs.1,048 crore from 1.5 crore lines which results in a revenue of only Rs.58 per line per month. Similarly revenues from other ecoveries including call charges revenue and PCO income total up to Rs.1,696 crore thereby working out to revenue of Rs.94 per line per month.

BSNL argues that the opex on rural lines on an annual basis is Rs.12,681 crore thereby resulting in an expenditure of Rs.702 per line per month. This excludes a depreciation of Rs 4,658 crore after taking into account 50 % extra expenditure on rural areas, said the CMD in his letter.

Thus the huge cap between the cost of a rural line and revenue earned from each line is clearly reflected, argues BSNL.