A N N U A L R E P O R T 2 0 0 3 - 2 0 0 4

DEPARTMENT OF TELECOMMUNICATIONSMINISTRY OF COMMUNICATIONS& INFORMATION TECHNOLOGY

GOVERNMENT OF INDIANEW DELHI

A N N U A L R E P O R T2 0 0 3 - 2 0 0 4

DEPARTMENT OF TELECOMMUNICATIONMINISTRY OF COMMUNICATIONS& INFORMATION TECHNOLOGY

GOVERNMENT OF INDIANEW DELHI

C o n t e n t s

● EXECUTIVE SUMMARY I-IV

I. TELECOM COMMISSION 1

II. DEPARTMENT OF TELECOMMUNICATIONS 3-17

II.1 CENTRE FOR DEVELOPMENT OF TELEMATICS 19-21

II.2 TELECOM ENGINEERING CENTRE 23

II.3 WIRELESS PLANNING AND COORDINATION WING 25-28

II.4 VIGILANCE ACTIVITIES 29-30

II.5 EMPOWERMENT OF WOMEN 31-32

II.6 AUDIT OBSERVATIONS OF C&AG 33-36

III. PUBLIC SECTOR UNDERTAKINGS 37

III.1 BHARAT SANCHAR NIGAM LIMITED 39-67

III.2 MAHANAGAR TELEPHONE NIGAM LIMITED 69-73

III.3 INDIAN TELEPHONE INDUSTRIES LIMITED 75-80

III.4 TELECOMMUNICATIONS CONSULTANTS INDIA LIMITED 81-86

IV GRAPHS & CHARTS 87-103

IV STATISTICAL SUPPLEMENT 105-113

ACRONYMS 115-116

ORGANISATION CHART 117

I

The reforms envisaged since 1991 in the telecomsector and pursued through National Telecom Policy-1994 and NTP-99 have resulted in an unprecedentedgrowth. The year 2003-04 has witnessed a recordgrowth of over 40% in the total number of phones,taking the total number to 765.40 lakh as on March31, 2004. The teledensity has increased from 5.11%in March 2003 to 7.02% in March 2004. Two importantfeatures of this growth are the increasing preferencefor mobile phones and the higher contribution of privatesector in the incremental growth. Cellular MobilePhones contribute to about 34% of the total telephonesand if the WLL mobile phones are included, the shareis a significant 44%. The share of private sector in thetotal number of phones, that was just 20.96% on March31,2003, stands at 39.27% as on March 31, 2004.

The performance has been achieved through certainpolicy measures encouraging level playing field forfair competition in the sector. During the year, certainimportant measures such as Calling Party Pays regime,Universal Access Service Licence, Interconnect UsageCharge regime and creation of non-lapsable UniversalService Obligation fund etc. were taken. In the recentpast, massive tariff cuts have been effected in allservices during 2003-04. STD charges for distancebeyond 200 kilometres have been reduced by 25%from Rs. 4.80 per minute to Rs. 3.60 per minute. ILDcharges have also come down drastically; e.g., calls toUSA, Canada & Europe cost only Rs. 7.20 per minuteas against Rs. 24.00 per minute that prevailed earlier.The prevalent market tariff for different capacities ofdomestic leased lines has reduced significantly toaround 50-70% of the tariff specifiedin TTO 1999. The charges of mobiletelephony were also reducedsubstantially.

The details of initiatives takenduring the year are as under:

(i) Guidelines for Unified AccessService Licence regime were issued on 11th November2003. Consequently, 27 licenses out of 31 Basic ServiceLicences were converted to Unified Access Service

Licences. Such unification is likely to result in betterservices at lower tariffs.(ii) The Licence fee has been reduced for AccessServices in the range of 15-25% depending on thecategory of the Service Area.(iii) Calling Party Pays (CPP) regime was implementedwith effect from 1st May, 2003.(iv) The Indian Telegraph Act was amended forestablishment of Universal Service Obligations (USO)Fund.(v) During the year, an amount of Rs. 200 crore wasallocated for the USO fund, which has been fullydisbursed to support the operation & maintenance ofmore than 5 lakh VPTs, uneconomic rural DELs andreplacement of MARR based VPTs to improve theQuality of Service.(vi) Guidelines were issued for Intra-Circle Mergersof Licences to provide for consolidation in the Sector.(vii) Bank guarantee for Infrastructure ProviderCategory-II was reduced from Rs. 100 crore to Rs. 5crore.(viii) The review of National Frequency AllocationPlan 2002 has been undertaken and is expected to becompleted by mid 2004.(ix) Three Internet exchanges have been set up at STPI,NOIDA, Mumbai and Chennai with financial supportfrom Department of IT. One more exchange at Kolkatais expected to be operational soon.(x) Clearance for commissioning of 60 ISP gatewayshas been given. 385 ISP licences have been issued, outof which 121 ISPs have been permitted to offer Internettelephony service as on March 31, 2004.(xi) In order to provide broadband access, BSNL has

planned to provide Overlay OpticFibre Access Network (OAN) incities having exchange capacity morethan one lakh lines. The AccessNetwork will facilitate provision ofoptical fibre to home, BroadbandInternet Access, MetropolitanNetworks (MAN) etc. In the firstphase, work has been taken up atBangalore, Mangalore, Chennai,

Coimbatore, Ernakulam, Calicut, Trivandrum,Hyderabad, Kolkata and Jaipur.

Executive Summary

(xii) Further, Local Multi-Point Distribution Systems(LMDS), suitable for extending the bandwidth from thetransmission centres/local exchanges to the customerpremises using line of sight point to multi-point radiotechnology, are also being deployed in BSNL network.In the first phase, 10 major cities, i.e., Delhi, Kolkata,Mumbai, Chennai, Bangalore, Hyderabad, Pune,Ahmedabad, Gurgaon and Noida are being covered.

(xiii) Managed Leased Line Network (MLLN) systemwas commissioned by MTNL in the year 2003 in Delhiand Mumbai. The system manages the leased lines ofsubscribers end to end, ranging from 64 Kbps to 2 Mbps.Till March 2004, MTNL has provided 2605 leased circuitsin Delhi and Mumbai.

(xiv) Several directives/regulations have been issued byTRAI regarding different telecom services, their tariffs,quality and Internet Services, which have contributedpositively towards the growth oftelecom sector.

2. Network expansion

During 2003-04, 219.2 lakh newconnections (33.1 lakh by BSNL &MTNL and 186.1 lakh by privatesector) were provided. The totaltelephone connections as on March31, 2004 were 765.4 lakhcomprising 464.8 lakh fixed linesand cellular connection provided byBSNL & MTNL and 300.6 lakh by the private sector.The equipped capacity of the PSUs increased from 545.6lakh lines as on March 31, 2003 to 600.3 lakh lines ason March 31, 2004. The total number of basic phonesincreased from 419.3 lakh to 503.9 lakh during this period.

As on March 31, 2004, 261.55 lakh Cellular MobilePhones (CMPs) and 5.22 lakh VPTs were provided byboth public & private operators. Apart from this, thepublic sector has provided 17.59 lakh PCOs by the endof March 2004, of which more than two lakh PCOs arein rural areas.

The users preference in favour of mobile phones againstfixed phones continued and as a result mobile phones

grew by about 160% while fixedphones grew by 3% during the year.The teledensity, which was 5.11percent as on March 31, 2003, hasincreased to 7.02 percent as on March31, 2004.

3. Increasing role of privatesector

significant role in the growth oftelecom sector. The share of privatesector in the total telephones

increased from 21% as on March 31, 2003 to 39% as onMarch 31, 2004.

Of the 219.2 lakh additional phones provided during2003-04, 186.1 lakh were provided by the private sector.

4. Increasing share of mobile phones

In the recent past, a continued positive shift has been

TELE-DENSITY (Number of Telephones per 100 Population)SINCE 1995-96

7.02

5.114.293.58

2.862.331.941.561.28

20.79

14.32

12.2010.37

8.236.87

5.784.76

3.95

0.93 1.21 1.49 1.550.680.520.430.340.29

01995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

YEAR

5

10

15

20

25

RURAL

TELE-DENSITYTOTAL

TELE-DENSITY

URBAN

TELE-DENSITY

TEL

E-DEN

SIT

Y

DISTRIBUTION OF TELEPHONES[Fixed+WLL+CMPs]

[PSUs+Pvt.] As on 31st March, 2004Pvt.Optrs.39%

MTNL6%

BSNL55%

DISTRIBUTION OF TELEPHONES[Fixed+WLL+CMPs]

[PSUs+Pvt.] As on 31st March, 2003

MTNL9%

BSNL70%

Pvt. Optrs.21%

II

observed in the use of mobile telephony. This is confirmedfrom the rising share of mobile phones (CMPs andWLL(M)) which has increased from 23.77% as on March31, 2003 to more than 44% (261.55 lakh CMPs and 75.45lakh WLL(M)) as on March 31, 2004.

5. Rural Telephony Out of the 6,07,491 villages in the country, 5,22,347villages have been provided withVPTs as on March 31, 2004. Ofthis, 5,09,682 VPTs have beenprovided by BSNL. The numberof rural DELs in the country hasincreased from 114.07 lakh as onMarch 31, 2003 to 122.72 lakhas on March 31, 2004. It isexpected that a lot more would be done with theimplementation of non-lapsable Universal Service Fund.

6. Foreign Direct Investment (FDI) During the period August 1991 to January 2004, 926proposals of Foreign Direct Investment (FDI) of

Rs. 57,260.14 crore were approved and the actual inflowof FDI during the above period was Rs.9872.5 crore. In

terms of approval of FDI, the telecom sector is secondlargest after Power & Oil Refinery sector.

7. Indigenous Research & Development,Val idat ion and Standardisat ion

The organisations/public sectorundertakings involved in indigenousresearch and development are Centrefor Development of Telematics (C-DOT), Telecom Engineering Centre(TEC) and Indian TelephoneIndustries Ltd. (ITI).

C-DOT was established in 1984as an autonomous body with the objective of developinga new generation of digital switching systems. C-DOThas developed a wide range of switching and transmissionproducts both for the rural and urban applications. Apartfrom Main, Medium and Small Automatic Exchanges,C-DOT has also developed an integrated Time DivisionMultiple Access - Point to Multi-Point (TDMA-PMP)for serving 256 subscribers sparsely distributed withina radius of 20 km. Some of the other products developedby C-DOT include ATM Switch and Multiplexer, NMSfor multiple Switch and Transmission equipmenttechnologies, Optical Amplifier, 2/8 and 2/34 OptiMUXand Compact STM-1 Synchronous Multiplexer.

The Telecom Engineering Centre is devoted to theproduct validation and standardization for the useragencies. During 2003-04, 46 Generic Requirements

Fixed Phones(incl. WLL(F)

(in lakh)

MobilePhones (incl.)

WLL(M))(in lakh)

Mar-03

Mar-04

SHARE OF FIXED & MOBILE PHONES INTELECOM NETWORK

428.40 337.00

416.30129.80

(Rs.

in M

illio

n)

FDI INFLOW YEAR-WISE [AUGUST'1991 TO JANUARY'2004]

YEAR

9876.5

22328.4

45097.3

84806.3

20.6 160.8 2228.2

40084.8

42211.5

95621.3 98635.3

98725.3

0

20000

40000

60000

80000

100000

120000

Aug.'1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Jan.'2004

ACTUAL FDI INFLOW

III

Share of rural and urban areas in thetotal DELs (Fixed and Mobile)

March 2003

Rural DELs Urban DELs

March 2004

21%

79%

16%

84%

(GRs) were issued in respect of various telecomequipment, and 91 field trials were conducted forevaluation of products in Optical, Satellite, Switchingand Radio areas. Besides, TEC also provides technicalsupport to Telecom Commission and the field units.

The Indian Telephone Industries Limited, besidesmanufacturing telecom equipment, offers customizedtelecom solutions and support to all types of customers.During the year 2003-04, the Company has executed apilot project for BSNL for the induction of ManagedLeased Line Network (MLLN) and Voice over InternetProtocol (VoIP) in 9 cities. Further, large-scaleimplementation of MLLN to cover 207 cities is undercompletion. ITI has executed the Nation�s first Broad-band Multi Protocol Label Switching � Virtual PrivateNetwork (MPLS-VPN) for BSNL in 10 major cities.Secured connectivity and assured quality of service areensured by this type of network.

8. Tariff Rebalancing Measures So far as telecom tariffs are concerned, the policy

initiatives by Government and the efforts by the Regulatorin the recent past have resulted in substantial decline intariffs for both basic and cellular services. During theyear 2003-04, tariffs for all telecom services have showna significant downward trend. Some important initiativestaken during the year are described below:

❧ TRAI issued the Telecommunication InterconnectionUsage Charges (IUC) Regulation on 29.10.2003. Thenew IUC Regime came into force from 1st February2004. The main features of the new IUC Regime arelower total amount of Access Deficit Charges (ADC),uniform termination charges of Rs.0.30 per minuteirrespective of terminating network, reduction of ADCon NLD and ILD calls, all of which resulted into lowertariff environment on voice telephony.

❧ TRAI recommended to the Government that ISPsshould be allowed to use any media (including fibre,radio and copper cable) for establishing their own lastmile to their customers. This recommendation has beengiven to encourage faster provision of High Speed InternetServices (Broadband) by stand-alone ISPs.

❧ Considering the intense competition in NLD andILD segments, vide 24th Amendment to TTO, effectivefrom 1st May 2003, NLD and ILD tariffs were forborneby the Authority subject to a ceiling of Rs. 8.40 per

minute for NLD calls. This amendment also gave animpetus to Internet usage by directing all BSOs to provideconcessional hours for access to Internet by dial-up.Further, taking into account the continued fall in tariffas a result of increased competition among accessproviders, vide 28th Amendment to TTO, the Authoritydecided to deregulate in total Basic, NLD and ILD tariffsexcept for the tariff applicable for rural areas. The cellulartariff (except roaming charges) continued to be forborneas earlier. TRAI notified 29th Amendment to TTOstreamlining the tariff to be applicable to E1/R2connectivity for Internet Service Providers.

9. International Cooperation:The following three projects were completed with thehelp of international agencies:

(i) Multi-purpose community Tele-centres Pilot Projectfor the Rajkot District in the state of Gujarat

(ii) APT Pilot Project on �Distance Learning & RemoteLibrary Access�

(iii) CIDA framework project.

Agreements were signed on co-operation in the fieldof telecommunications with Australia, Myanmar andSudan. Apart from the above, the Department ofTelecommunications has constructively contributed invarious international Meetings/Conferences and otheractivities, especially those of ITU-D, ITU-T, ITU-R &APT, for formation of a global information society.

10. A potential challengeThe digital gap measured in terms of teledensity

amongst various States is quite visible. It is observedthat at the end of March 2004, while the metros, Punjab,Gujarat, Himachal Pradesh, Andaman & Nicobar Islandsand Kerala have a teledensity of more than 10%, Assam,Bihar, Chattisgarh, Jharkhand, Orissa, North-East II,Uttar Pradesh and West Bengal telecom circles have ateledensity of less than 3%. Further, the gap betweenrural and urban teledensities has widened. Thisnecessitates appropriate measures to be taken for fastergrowth in the States/areas lagging in telecom coverage.Further, with the import liberalisation and reduction incustoms duty, the indigenous manufacturing base hasbeen shrinking. The domestic manufacturing requiresto be encouraged and expanded to meet the needs of thefast growing telecom sector.

IV

1

Chairman Shri Vinod Vaish From 31.05.2002 to 31.01.2004

Shri Nripendra Misra W.E.F 01.02.2004

Member (Finance) Shri N. Parthasarathy W.E.F. 01.03.2002

Member (Production) Shri P.P. Ramachandran From 20.02.03 to 30.11.03

Shri J.M. Misra W.E.F. 20.02.2004

Member (Services) Shri D.P.S. Seth From 05.03.02 to 28.02.03

Shri P. K. Chanda W.E.F. 19. 06.2003

Member (Technology) Was being looked

after by Member (S) From 01.08.2002 to 01.07.2003

Shri K. H. Khan W.E.F. 02.07.2003

I. Telecom CommissionRole and Functions

The Telecom Commission was set up by theGovernment of India vide Regulation dated 11th April,1989 with administrative and financial powers of theGovernment of India to deal with various aspects ofTelecommunications. The Commission consists of a

Chairman, four full time members, who are ex-officioSecretaries to the Government of India in theDepartment of Telecommunications and four part timemembers who are the Secretaries to the Governmentof India of the concerned departments. The presentcomposition of the Commission is as follows: -

The Part time Members are Secretary (IT), Secretary (Finance), Secretary (Planning Commission)and Secretary (IP & P).

The major functions of Telecom Commission include policy formulation, review of perfomance,licensing, wireless spectrum management, administrative monitoring of PSUs, research anddevelopment and standardization/validation of equipment and International Relations.

* * *

3

Role and Functions

The Department of Telecommunications (DOT) isresponsible for policy formulation and grant of licencesto operators for providing basic and value added servicesin various cities and telecom circles as per approvedpolicy of the Government. The Department alsoallocates frequency and manages radio communicationsin close coordination with the International bodies. Itis also responsible for enforcing wireless regulatorymeasures and monitoring the wireless transmission ofall users in the country. The office of Administrator,Universal Service Obligation (USO) Fund has beenset up w.e.f. 1-6-02 for the purpose of implementationof Universal Service Support Policy. After formationof Bharat Sanchar Nigam Ltd, (BSNL) in October2000, following are the functions assigned to the DOTunder Government of India (Allocation of Business),Rules, 1961:

i) Implementation of treaties and agreements with othercountries relating to matters dealt with in the Departmentof Telecommunications.

ii) Policy, Licensing and Coordination matters relatingto telegraphs, telephones, wireless, data, facsimile andtelematics services and other like forms ofcommunications.

iii) International relations in matters connected withtelecommunications, including matter relating to allinternational bodies dealing with telecommunicationssuch as International Telecommunication Union (ITU),its International Frequency Regulation Board (IFRB),Rad io Communica t ion Sec to r ( ITU-R) ,Telecommunication Standardization Sector (ITU-T),Development Sector (ITU-D), InternationalTelecommunication Satell i te Organization(INTELSAT), International Mobile SatelliteOrganizat ion (INMARSAT), Asia Pacif icTelecommunication (APT).

iv) Promotion of standardization, research anddevelopment in telecommunications.

v) Promot ion of p r iva te inves tment inTelecommunications.

vi) All matters relating to personnel under the controlof the Department of Telecommunications.

vii) Financial assistance for the furtherance of researchand study in telecommunications technology and forbuilding up adequately trained manpower for telecomprogramme, including:

(a) Assistance to institutions/scientific institutions anduniversities for advanced scientific study and research;and

(b) Grant of scholarships to students in educationalinstitutions and other forms of financial aid toindividuals including those going abroad for studiesin the field of telecom.

viii) Procurement of stores, and equipment requiredby Department of Telecommunications.

ix) Financial sanctions relating to the Department ofTelecommunications.

x) Telecom Regulatory Authority of India.

xi) Administration of laws with respect to any of thematters specified in this list, namely:

(a) The Indian Telegraph Act 1885 (13 of 1885).

(b) The Indian Wireless Telegraphy Act, 1933 (17 of1933); and

(c) The Telecom Regulatory Authority of India Act,1997 (24 of 1997).

xii) Enquiries and statistics for the purpose of any ofthe matters specified in this list.

xiii) Fees in respect of any of the matters specified inthis list, but not including fees taken in any court.

xiv) Indian Telephone Industries Limited.

xv) Bharat Sanchar Nigam Limited

xvi) Mahanagar Telephone Nigam Limited andTelecommunications Consultants (India) Limited.

II. Department of Telecommunications

4

xvii) All matters relating to Centre for Developmentof Telematics (C-DOT)

xviii) Residual work relating to the erstwhileDepartment of Telecom Services and Department ofTelecom Operations, including matters relating to thefollowing:

(a) Cadre controlling functions of Group �A� and othercategories personnel till their absorption in BharatSanchar Nigam Limited;

(b) Administration and payment of terminal benefits.

xix) Execution of works purchase and acquisition ofland debitable to the Capital Budget pertaining totelecommunications.

Physical Performance

During 2003-04, the telecom sector has exhibiteda significant growth as measured in terms of thetelecom development parameters. The number ofphones provided during the year was 219.2 lakh ascompared to 96.5 lakh during 2002-03. The growththis year was more than 40%. The tele-density hasincreased from 5.11% inMarch�03 to 7.02% inMarch�04. The total numberof phones, as on March 31,2004 stands at 765.40 lakh ascompared to 546.17 lakh ason March 31, 2003. As onMarch 31, 2004, the numberof Cellular Mobile Phones(CMPs) was 261.55 lakh andthat of VPTs was 5.22 lakh,provided by both public andprivate operators. 17.59 lakh PCOs and 122.72 lakhrural DELs have been provided by the public sectoras on March 31, 2004. The equipped capacity of thepublic sector unit (BSNL & MTNL) increased from545.6 lakh lines as on March 31, 2003 to 600.3 lakhas on March 31, 2004.

The share of private sector has also shownconsiderable increase in the number of phones over

the previous year. The share was just 20.96% (114.46lakh) in March�03 and now stands at about 39.27%(300.57 lakh) in March�04. In the recent past, acontinued positive shift has been observed in the areaof mobile telephony. This is confirmed from therising share of Mobile Phones (CMPs+WLL (M))which has increased from 23.77% (129.83 lakh) ason March 31, 2003 to 44.03% (261.55 lakh CMPs +75.45 lakh WLL(M)) as on March 31, 2004. Therelative performance during March 2002 to March2004 has been given in the Table-8 of the StatisticalSupplement of the Annual Report.

Tariff Changes

So far as telecom tariffs are concerned, the policyinitiatives by government and the efforts by theRegulator in the recent past have resulted in substantialdecline in tariffs for both basic and cellular services.Presently basic and mobile service tariffs are alreadyforborne, with the exception of fixed line tariffs forrural subscribers. This has been done primarily not toharm growth in teledensity in rural area.

The major contributor to the success story of telecomIndia is the reduction in tariffs and its sustained

rationalization. With a viewto bringing the tariffs closerto cost, TRAI had begun thetariff rebalancing exercise in1999. This together with thee l e m e n t o f i n t e n s ec o m p e t i t i o n b e t w e e nincreas ing number ofoperators has resulted inmassive tariff cuts in allservices and especially for

long distance calls.

During the year 2003-04, tariffs for all telecomservices have shown a significant downward trend.

The National Long Distance (NLD) rates for thedistance slab beyond 500 Kms. have declined by 50%from a level of Rs. 9.60 to Rs. 4.80 per minute.

ILD charges have come down drastically due to

5

certain promotional tariff plans of International LongDistance Operators. For instance, calls to UK cost onlyRs. 7.20 per minute as against Rs. 24.00 per minutethat prevailed earlier.

The tariffs for Domestic leased lines have also reducedsignificantly. The prevalent market tariff for differentcapacities of leased lines is around 50-70% of the tariffspecified in TTO 1999.

Considering the large number of tariff plans offeredby various operators in the market in the existingcompetitive scenario, TRAI issued guidelines/directiveon a tariff format for consumer information to bepublished by the telecom service providers. These areintended to help the consumer to be better aware ofthe overall financial expenditure under any particulartariff package and to compare various tariff packagesthat are on offer.

Regulatory framework in the Telecom Sector

The Telecom Regulatory Authority of India (TRAI)was established under the Telecom RegulatoryAuthority of India Act, 1997 enacted on 28th March1997. The TRAI (Amendment) Act, 2000 led toreconstitution of the Authority. It consists of oneChairperson, two full time members and two part timemembers. The present composition of TRAI is asfollows:

1. Shri. Pradip Baijal Chairperson

2. Dr. D.P.S. Seth Whole-time member

3. Sh. P. K. Sarma Whole-time member

4. Dr. Arvind Virmani Part-time member

5. Prof. Sanjay Govind Dhande Part-time member

The goals and objectives of TRAI are focussedtowards providing a regulatory regime that facilitatesachievement of the objectives of New Telecom Policy(NTP) 1999. TRAI has endeavored to encourage greatercompetition in telecom sector together with betterquality and affordable prices, in order to meet theobjectives of NTP�99. Vide a Notification of the

Government, from 9th January 2004, Broadcasting andCable Services have also been included in the definitionof �telecommunication service� under the TRAI Act.Thus, Broadcasting and Cable Services have also comeunder the purview of TRAI. A number of policyinitiatives were taken during 2003-04 to facilitatereform in the telecom sector and extend the scope,availability and reach of telecom services in India,which are summarised as under:(a) Interconnection Usage Charges:

In January 2003, TRAI notified the InterconnectionUsage Charges Regulation, 2003 which coveredarrangements among service providers for payment ofinterconnection usage charges, covering Basic Servicesincluding WLL(M), Cellular Mobile Services, NLDand ILD Services. This regulation provided for chargespayable by one operator to another for origination,transit and termination of calls in a multi-operatorenvironment. During 2003-04, based on severalrepresentations received from telecom service providersand stakeholders with respect to the IUC Regime aswell as tariff under the new regime, TRAI carried outan extensive review of the IUC Regulation and issuedthe Telecommunication Interconnection Usage ChargesRegulation on 29.10.2003. The new IUC Regime cameinto force from 1st February 2004. The main featuresof the new IUC Regime are lower total amount ofAccess Deficit Charges (ADC), uniform terminationcharges of Rs.0.30 per minute irrespective of terminatingnetwork, reduction of ADC on NLD and ILD calls, allof which resulted into lower tariff environment onvoice telephony.

(b) Quality of Service:

Based on the Quality of Service Regulation for Basicand Cellular Services issued in July 2000, TRAIcontinued to monitor the Quality of Service (QoS) ofbasic and cellular service providers on the basis ofquarterly performance reports received from them.TRAI also engaged an independent expert agency,namely, M/s India Marketing Research Bureau (M/sIMRB) in September 2003 for objective assessmentof QoS of basic and cellular service providers as wellas subjective assessment of customer satisfaction survey.M/s IMRB have been asked to submit report for fourquarters from October 2003 to September 2004. During

6

this period, TRAI also conducted two customer surveyson quality of Internet services with a view to improvethe quality of Internet services in the country.

(c) Consumer Protection:

During the year, considering the large number oftariff plans available in the market in the existingcompetitive scenario, TRAI issued guidelines/directiveon a tariff format for consumer information, which isrequired to be published/advertised by the telecomservice providers. These guidelines are intended tohelp the consumer to be better aware of the overallfinancial expenditure under any particular tariff packageand to compare various tariff packages that are onoffer. Further, in order to address the issue of theinordinately long period of time taken by serviceproviders for refund of security deposit afterdisconnection of the telephone, the Authority, in theinterest of consumers laid down a time frame of 60days within which service providers shall effect refundof the security deposit after adjustment of dues if anyfrom the subscribers. It was further decided that serviceproviders shall pay an interest @ 10% per annum forthe delayed period beyond 60 days.

Certain value added services like voicemail serviceand auto roaming facility were earlier offered byCMSPs to the cellular subscribers without their consent.As it may result in subscribers paying up for theseservices, Authority issued guidelines stating that auto-roaming facility in respect of pre-paid cards shall beprovided to the customer only with his consent.Similarly, the Authority reiterated that the CMSPsshould seek the consent of the subscriber beforeproviding voicemail service.

(d) Unified Licensing Regime:

Taking into account the technological developmentsin the telecom sector, extended scope of serviceprovided by new technologies, falling cost of wirelessservices, blurring of difference between wireline andwireless, increasing competition among the services,the converging tariffs for wire and wireless servicesand the international trend for non-service specificlicenses through a process of Authorisation/Converged

licenses, the Authority felt that there is no justificationin continuing a service-wise licensing regime. Aftergoing through a detailed consultation process, TRAIgave its recommendations to the Government on 27th

October, 2003 to move towards a unified licensingregime starting with a unified access-licensing regime.The objective of unified licensing/authorization regimeis to be achieved in a two stage process with the unifiedaccess regime for basic and cellular services in the firstphase, to be followed up with a process to define thegu ide l ines and ru les fo r fu l ly un i f i edlicense/authorization regime. This has given a boostto the growth in the mobile subscriber base and resultantdecrease in price. The Government has already acceptedthe recommendations of TRAI in this regard and aunified access licensing regime is in place. The TRAIhas also started consultation on the second phase ofunified license. It is envisaged that new unifiedlicensing/authorization Regime will enable the serviceproviders to offer any or all services using technologyof his/her choice with area of operation so defined asto promote greater participation of all types of big andsmall entrepreneurs.

(e) Intra-circle Mergers & Acquisitions:

The Authority gave its recommendations to theGovernment on Intra-circle mergers and Acquisitionson 30th January 2004, after studying the prevalentinternational practices and after consultations with theexperts on the subject. These recommendations alsohave been accepted by the Govt.

(f) Reporting on Accounting Separation:

TRAI issued a Regulation on Reporting System onAccounting Separation on 25th February 2004, to callfor audited reports on separated accounts of differentservices of a service provider. Service providers arenow required to submit accounting statements separatelyfor every service and product/network service for eachof the licensed areas. This reporting system wouldinter-alia help generate accurate information on costsnecessary to determine IUC and in identification ofcross-subsidisation practices in the industry.

7

(g) TRAI�s recommendation allowing ISPs to useany media (including copper) to establish their lastmile:

In order to provide an impetus to the growth of high-speed Internet access and make ISP Licence technology-neutral as far as last mile access is concerned, TRAIrecommended to the Government that ISPs should beallowed to use any media (including fiber, radio andcopper cable), for establishing their own last mile totheir customers. This recommendation has been givento encourage faster provision of High Speed InternetServices (Broadband) by stand-alone ISPs.

(h) Deregulation of Tariff for TelecommunicationsServices

Considering the intense competition in NLD andILD segments, vide 24th Amendment to TTO, effectivefrom 1st May 2003, NLD and ILD tariffs were forborneby the Authority subject to a ceiling of Rs. 8.40 perminute for NLD calls. This amendment also gave animpetus to Internet usage by directing all BSOs toprovide concessional hours for access to Internet bydial-up. Further, taking into account the continued fallin tariff as a result of increased competition amongaccess providers, vide 28th Amendment to TTO, theAuthority decided to deregulate total Basic, NLD andILD tariffs except for the tariff applicable for ruralareas. The cellular tariff (except roaming charges)continued to be forborne as earlier. TRAI notified 29th

Amendment to TTO streamlining the tariff to beapplicable to E1/R2 connectivity for Internet ServiceProviders.

Telecom Disputes Settlement and Appellate Tribunal

Telecom Disputes Settlement and Appellate Tribunal(TDSAT), since its establishment in May 2000 inpursuance of the amendments made to TRAI Act 1997,is empowered to adjudicate any dispute between alicensor and a licensee, between two or more serviceproviders, between a service provider and a group ofconsumers, and also hear and dispose off appeal againstany direction, decision or order of the Authority underthe TRAI Act. TDSAT has since then heard anddisposed of many disputes relating to the telecomsector. The present composition of TDSAT is as follows:

1. Justice (Retd.) D.P. Wadhwa Chairperson

2. Shri Vinod Vaish Member

3. (Vacant) Member

Communication Convergence Bill, 2001

In pursuance of the New Telecom Policy (NTP) �1999, action was taken to prepare a new comprehensivestatute to replace the Indian Telegraph Act 1885,keeping in view the rapid convergence of telecom,computers, television and electronics. Accordingly,the Communication Convergence Bill, 2001, a Bill topromote, facilitate and develop in an orderly mannerthe carriage and content of communications (includingbroadcasting, telecommunications and multimedia),for the establishment of an autonomous Commission[i.e., the Communications Commission of India] toregulate carriage of all forms of communications, andfor establishment of an Appellate Tribunal [i.e. theCommunications Appellate Tribunal] and to providefor matters connected therewith was introduced in theLok Sabha on 31.08.2001. The Bill was referred tothe Standing Committee on Information Technologyfor examination.

The Committee had submitted its Report on 20th

November 2002. The recommendations of theCommittee are under examination even though the saidBill has lapsed on account of dissolution of the LokSabha.

Exhibition and Investment Promotion (EIP)

Department of Telecommunications through its EIP-Cell is looking after the activities relating to Exhibitionsand Investments. The main activities of the Cell are:

� Interaction with Business Councils/IndustryA s s o c i a t i o n s / F o r e i g n C h a m b e r o fCommerce/NRIs/Other Government/Semi-Government bodies concerned with investmentpromotion.

� Preparation of video films for promotion of Govt.policies.

� Printing of promotional literature and itsdistribution.

� Organization of participation in investment relatedconferences/seminars/ exhibitions.

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� Arranging publicity about avenues/scope of privateinvestment in Telecom sector

� Meetings/discussions with foreign delegates inrespect of investment in Telecom sector.

� Deputation of officers from DOT for attendingnational/international conferences / seminars /exhibition concerned with the investment promotionin telecom sector.

� Interaction with Indian Investment Centre andother Govt./Semi-Govt. bodies concerned withinvestment promotion in the Telecom Sector.

� Participation of DOT in Republic Day ParadeTableau.

During the year 2003-04, DOT participated in thefollowing exhibitions: -

i) Supercomm 2003, 1-5 June 2003, Atlanta, Georgia.

ii) ITU Telecom World 12-18 October 2003, Palexpo,Geneva.

iii) WSIS 2-7 December 2003, at Geneva.

iv) Supercomm India 2004, 20-22 January 2004 atNew Delhi.

v) Convergence India 2004, 18-20 March 2004 at NewDelhi.

Other Service Providers (OSP)

OSP cell does the registration under the OSP category. Services like Call centres, Tele-banking, Tele-medicine,Tele-education, Tele-trading and other IT enabledservices, which use infrastructure provided by variousaccess providers are given registration under the OSPcategory as defined by NTP�99. Around 700registrations have been given to companies for providingservices like Call Centres, Tele-banking, Tele-marketing, Vehicle-Tracking System, Long rangeAlarm system, Network Operation Centre etc. Worldgiants like IBM, Microsoft, HSBC Bank, AmericanOn Line (AOL), American Express, GE Capital, SprintRPG, British Airways, Conseco Group etc. have setup their Call centres in India. Revenue in IT-enabledservice increased from Rs. 2,400 Crore in 1999-2000to Rs. 11,700 Crore in 2002-03. The total direct andindirect employment is over 1.5 lakh in this sector.

Investment Policy (IP)

Development and Regulation of Telecom Industrywas being looked after by the Department of Electronicsuntil the formation of Telecom Commission in 1989.With the formation of Telecom Commission, allactivities relating to development and regulation ofTelecom Industry were transferred from Departmentof Electronics to the Telecom Commission. At present,IP Cell of DOT is responsible for the development andregulation of the Telecom Industry in the country.The main activities are given as under:

i . Providing assistance in formulation offoreign investment policies and procedures for theTelecom Sector.

ii. Policy and guidelines on foreign direct investmentin telecom sector � maintenance of database on FDIin various sectors.

iii. Processing of applications for foreign investmentand foreign technology in Telecom Sector.

iv. Providing assistance in formulation of Import andExport policies for the Telecom Sector. Cases relatingto Advance License /Special Imprest License/EPCGetc.

v. Formulation of policies for stimulating privateinvestment in Telecom Sector. Assistance inmatters relating to Trade and Industrial policies for theTelecom Sector

vi. Matters relating to promotion of Telecom Exports.

vii. Assistance in matters relating to Customs andExcise duties and other Direct and Indirect Taxes forthe Telecom Sector.

viii. Preparation of telecom proposals relating to AnnualBudget.

ix. Assistance to various industrial units in the Telecomsector for implementation of their projects.

x. Follow up action on issues relating to projectimplementation in the Telecom Sector. Providingsecretarial assistance to the Fast Track Committeeformed under the Foreign Investment ImplementationAuthority of Department of Industrial Policy andPromotion.

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Manufacture of Telecom Equipments

India is a major manufacturer of a wide variety oftelecom equipment. The growth in telecom equipmentproduction in the country is as follows:

Year Production (Rs. in Crore)

1993-94 55001994-95 70001995-96 77501996-97 83001997-98 99601998-99 100001999-00 107602000-01 122712001-02 154372002-03 14400

Source: TEMA

Export of Telecom EquipmentsGrowth in exports of telecom equipment and servicesis as follows:

Year Service Consultancy@ Hardware#(Rs. in Crore) (Rs. in Crore) (Rs. in Crore)

1993-94 456 118 58

1994-95 598 207 131

1995-96 1108 235 310

1996-97 1458 270 240

1997-98 2232 313 296

1998-99 2376 383 250

1999-00 3230 337 180

2000-01 2882 368 450

2001-02 4149 378 150

2002-03 3050 327 402@Source: TCIL#Source: DGCIS

Foreign Direct Investment (FDI)

Foreign Direct Investment (FDI) up to 100% hasbeen allowed in the telecom-manufacturing sector andservices like e-mail, voice-mail, Internet (withoutgateways), Infrastructure Providers (IP-I). 74% FDI

is allowed in case of Radio Paging Service, Internet(with gateways) and end-to-end bandwidth providers(IP-II). In case of Basic, Cellular, National/InternationalLong Distance Service and Value Added Services, FDIis limited to 49%. Foreign Direct Investment up to49% is also permitted in an investment company, setup for making investment in the telecom companies�license to operate telecom services. Investment bythese investment companies in a telecom servicecompany is treated as part of domestic equity and isnot set off against the foreign equity cap.

During the period August 1991 to January 2004,926 proposals of foreign direct investment (FDI) ofRs. 57,260.14 crore were approved, which is secondonly to Power & Oil Refinery Sector. The actual inflowof FDI during the above period was Rs. 9872.5 crore.

Actual Inflow (Year Wise) of FDI in Telecom Sector

from Aug�93 to Jan�04

(Rs. in crore)

Year FDI Year FDIINFLOW INFLOW

1993 2.06 1999 212.67

1994 14.02 2000 288.58

1995 206.74 2001 3970.90

1996 764.83 2002 1081.50

1997 1245.19 2003 301.35

1998 1775.64 2004 (Jan.) 9.00

TOTAL 9872.48

Indian State-of-the Art Telecom Equipment Manufacturing Plant

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Private Sector ParticipationProgress made during the year 2003-04 is as follows:

Basic Services

� The subscriber base of Private Basic Service/UnifiedAccess Service Licensees has seen a growth of theorder of 350% in the year 2003-04 and the subscriberbase stood at 95 lakh as on March 31, 2004.� Keeping with the trend of conversion of technologies,guidelines for Unified Access Service Licence regimewere issued in November 2003. Consequently, 27licences out of 31 Basic Service Licences wereconverted to Unified Access Service Licences. Further,18 more new licences have been issued for UnifiedAccess Service during the current financial year. Suchunification is likely to result in better services at acheaper rate to the consumers.

� The Cellular Operator withdrew their petition filedbefore the Hon�ble Supreme Court against the decisionof Telecom Disputes Settlement and Appellate Tribunal(TDSAT) in the case of Wireless in Local Loop (WLL)matter. This paved a path for a litigious freetelecommunication sector.

� The Government continued to adopt policies toprovide incentives for telecommunication sector forsupporting its exponential growth. Accordingly, itwas decided to reduce the licence fee in the range of15% to 25% depending upon the category of theService Area for Access Services. Further, variousCustom Duties were also reduced so as to provide

The details of actual inflow of FDI (country-wise) inTelecom Sector from August 1991 to January 2004 aregiven below:

(Rs. in Million)S. NO. Country FDI %1 Argentina 0.01 0.00%2 Australia 700.90 0.71%3 Austria 9.50 0.01%4 Bahrain 8.00 0.01%5 Bahamas 13.78 0.01%6 Bermuda 64.85 0.07%7 Canada 411.60 0.42%8 Denmark 72.50 0.07%9 Finland 355.80 0.36%10 France 1009.37 1.02%11 Germany 12.70 0.01%12 Hong Kong 741.26 0.75%13 Israel 800.00 0.81%14 Japan 539.80 0.55%15 Kuwait 0.50 0.00%16 Luxembourg 101.60 0.10%17 Malaysia 599.90 0.61%18 Mauritius 71374.01 72.30%19 Netherlands 3157.57 3.20%20 NRI 889.00 0.90%21 Philippines 73.50 0.07%22 Singapore 55.86 0.06%23 South Korea 198.50 0.20%24 Sweden 1531.90 1.55%25 Switzerland 4.70 0.00%26 Spain 0.74 0.00%27 Thailand 2211.60 2.24%28 UK 8875.89 8.99%29 USA 4904.76 4.97%30 Sri Lanka 4.73 0.00%

TOTAL 98724.83

Releasing BSNL/MTNL Procurement manual- MOC(IT) Sh. Arun Shourie,Secretary,(DOT) Sh. Vinod Vaish & TEMA President, Sh. N. K. Goyal

Actual Inflow (Sector Wise) of FDI in Telecom Sectorfrom Aug�91 to Jan�04

(Rs. in Million)S. No. SERVICE/ITEM FDI %1 Basic Telephone Service 3937 4.00%2 Cellular Mobile Telephone Service 25862 26.26%3 Radio Paging Service 910 0.92%4 E-Mail Service 688 0.70%5 VSAT Service 281 0.29%6 Cable TV Network + Internet 1704 1.73%7 Satellite Telephone Service 481 0.49%8 Radio Trunking Service 71 0.07%9 Manufacturing & Consultancy 15784 16.03%10 Holding Companies 48420 49.05%11 Other Value Added Services 227 0.23%12 Automatic Route 361 0.37%

TOTAL 98725

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incentive to the sector.

� The tariffs for the various services further experienceda downward trend apart from harmonization. CallingParty Pays (CPP) regime put into place with effectfrom 1st May 2003.

� Indian Telegraph Act 1885 was amended forestablishment of Universal Service Obligation (USO)Fund. The fund will be utilised to provide support tovarious services providers for providing services inrural and remote areas.

� In order to provide consolidation in the sector,guidelines for Intra-Circle Mergers of licences wereissued after considering the recommendations of theTelecom Regulatory Authority of India (TRAI). Thisalso provides for a way to exit for the service providerswho want to exit the business.

� The bank guarantee for infrastructure providercategory-II was reduced from Rs.100 crore to Rs.5crore.

National Long Distance Services (NLDS)/IP-II/IP-I and International Long DistanceServices (ILDS)

After announcing opening up of ILDS and NLDSfor free competition, government has issued 5 ILDSlicences and 4 NLDS licences (including BSNL).During 2003-04, two companies have been issued LOIfor ILDS and one company has been registered asInfrastructure Provider-I (IP-I).

Value Added Services

Cellular Mobile Telephone Services

There are 78 licences owned by 20 companies for23 Service Areas with a maximum of 4 licences in aService Area. The growth rate of cellular customershas continued to be excellent during 2003-2004. Thenumber of cellular customers has reached a figure of2,61,54,405 as on 31.3.2004, in addition 75.45 lakhWLL (Mobile) have also been provided.

Consequent upon the acceptance of recommendationsof TRAI for Unified Access Services Licence regimefor Cellular and Basic service operators by the Cabineton 31.10.2003, DOT has taken the following important

steps for implementation of the Cabinet decision:

1. Addendum to NTP-99 issued on 11th November2003 to include the following categories of Licencesfor Telecommunications Services:

(i) Unified Licence for Telecommunication Servicesp e r m i t t i n g L i c e n s e e t o p r o v i d e a l ltelecommunication/telegraph services covering variousgeographical areas using any technology;

(ii) Licence for Unified Access (Basic and Cellular)Services permitting Licensee to provide Basic and/orCellular Services using any technology in a definedservice area.

2. Guidelines for Unified Access (Basic & Cellular)permit issued on 11.11.03.

Universal Access Services Licence (UASL) permitsservice provider to provide Basic or Cellular Servicesincluding fully Mobile Service in the service area. 27Private Basic Operator�s licences have been convertedinto UASL. A total amount of Rs. 2168.57 Crore hasbeen collected. Further, 20 Letters of Intent (LOIs)have been issued for grant of UASL. It is expected tofetch Rs. 563.86 crore as entry fee. Reduction inlicence fee has led to growth in terms of number ofsubscribers. It is proposed to reduce the licence feeby 2% in respect of Basic/Cellular/UASL licences fromthe next financial year.

Voice Mail Service /Audiotex/Unified MessagingService

Policy for Voice Mail/Audiotex Service in terms ofNTP�99 was announced in July 2001 by incorporatinga new service, namely, Unified Messaging Service(UMS).

UMS is a system by which voice mails, fax and e-mails (all the three) can be received from one mailboxusing telephone instrument, fax machine, mobilephones, Internet browsers, etc. Presently, there are 6companies having 13 licences in total to provide theseservices in 8 cities.

Public Mobile Radio Trunk Service

Policy for Public Mobile Radio Trunk Service(PMRTS) in terms of NTP�99 has been announced on

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01.11.2001. Presently, there are 15 companies having42 licences in total to provide PMRTS service in 22cities.

GMPCS Service

Policy for grant of licence for Global Mobile PersonalCommunication by Satellite Service in terms of NTP�99has been announced on 02.11.2001.

Internet Service

As on 31st March 2004, 385 ISP licences (InternetService Provider licences) have been issued out ofwhich 121 ISPs have been permitted to offer Internettelephony. As on 31st March 2004, clearance forcommissioning of 60 ISP gateways has been given.Applications have been received for setting up ofSubmarine Cable Landing Station for InternationalG a t e w a y s a t M u m b a i , C h e n n a i a n dThiruvananthapuram.

Three Internet exchanges have been set up at STPI,NOIDA, Mumbai and Chennai with financial supportfrom Department of IT. One more exchange at Kolkatais expected to be operational soon.

Very Small Aperture Terminal (VSAT) Service

There are 12 licences for Commercial VSAT Serviceas on 31st March 2004.

International Cooperation

In the field of international cooperation, workshops,seminars and training programmes are held both withinthe country and outside. Deliberations are held withthe visiting foreign dignitaries, apart from the visits toother countries to hold discussions on the relevantsubjects. The details of the programmes/discussionsheld during 2003-2004 are given below:

International Pilot Projects

During 2003 � 2004, following International PilotProjects were completed with the help of Asia PacificT e l e c o m m u n i t y ( A P T ) / I n t e r n a t i o n a lTelecommunication Union (ITU) / United NationsEducational Scientific & Cultural Organization(UNESCO) and State Governments.

(i) Multi-purpose Community Tele-Centers PilotProject for the Rajkot District in the State ofGujarat.

The project was commissioned on 01.08.2003 withthe assistance of ITU / UNESCO / State Government.The objective of the project was to provide Multi-purpose Community Tele-Center, which can work ona self-sustainable basis in 12 villages in District Rajkot,Gujarat with the following facilities

(a) Telecommunication services such as, Local/STDPCO, FAX

(b) E- Mail and Access to Internet

(c) Tele medicine, tele-administration and E-Commerce

(d) Tele-education.

In addition, the project is intended to improve thequality of life of the community at large by these hightechnology facilities in Rajkot area. It is likely to bereplicated in other areas of Gujarat and thereafter inother States of India.

(ii) APT PILOT PROJECT ON "Distance Learningand Remote Library Access�

The project was commissioned on 09.09.2003 withthe assistance of APT. The objective of this Pilot Projectis to demonstrate certain multimedia application utilizingthe existing information infrastructure i.e. ISDN andPacket Switched Public Data Network (PSPDN)/INet.The aim of the project is to enable DOT/BSNL officersto study, understand and demonstrate multimediaapplications that will serve the following purposes:

1. Disseminating technical or any other information atnumber of sites at the same time.

2. Possibility of remotely viewing and listening tolectures/presentations conducted at a distant location.

3. Possibility of audience to interact remotely duringlectures/presentations.

4. Remotely accessing the information available atdistant libraries maintained by different telecom trainingcentre and TEC/C-DOT sites.

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(iii) CIDA Framework Project

The project was executed with the assistance ofCanadian International Development Agency. Theobjective of this project was to establish appropriateins t i tu t ional f ramework in the f ie ld oftelecommunications to support the creation of anenabling environment conducive to increased privateinvestment in the telecom sector: The project includesfour components, viz., (a) Regulation � related to TRAI,(b) Frequency Spectrum Management � related toWPC, (c) Standards-related to TEC and (d) R&D-related to C-DOT

Signing of Agreements/ MoUs with othercountries

! An Agreement between India and Australia oncooperation in the field of Telecommunications wassigned in August 2003 in Melbourne during the visitof Hon�ble Minister of External Affairs to Australia.! An Agreement between India and Myanmar oncooperation in the field of Communications, InformationTechnology & Services was signed in August, 2003in Myanmar during the visit of Hon�ble MOC &IT toMyanmar.! An MoU between India & Sudan was signed on21.10.2003 in the field of development oftelecommunications & IT during the visit of Hon�blePresident during 20-22 October, 2003 in Sudan.

Inter-Ministerial Meetings on InternationalCo-operation held during 2003-04 in NewDelhi.

i) 14th session of the INDO �Swedish Joint CommissionMeeting from April 1-2, 2003.

ii) Second meeting of the Steering Committee for ITU-UPU Project on establishing telekiosks in Post Officesin Afghanistan on 17th April, 2003.

iii) CIDA Assisted Projects review meeting inDepartment of Economic Affairs on 23rd April, 2003.

iv) Preparatory meeting as a forerunner to the ForeignSecretary�level talks between India and Bangladeshin Dhaka on 24th April, 2003.

v) On 6th May, 2003 preparatory meeting for 12th

session of the Indo-French Joint Commission meetingheld in Paris on 18th June, 2003.

vi) Coordination meeting to review the progress ofTelecommunications Operation Project being executedwith the assistance of CIDA in the Hoshangabad Districtof M.P. Circle on 3rd June, 2003.

vii) To identify thrust areas for the Indo- Africa JointCommunication held in Pretoria, South Africa on 20th

June, 2003.

viii) 1st India- Indonesia Joint Commission Meetingon 11th August, 2003.

ix) On 22nd September, 2003 preparatory meetingrelating to the proposed visit of the Prime Minister toIndonesia & Thailand during October, 2003.

x) On 24th September, 2003 preparatory meeting as aforerunner to the 16th India Romania Joint CommissionMeeting during 20th & 21st October, 2003.

xi) On 29th September, 2003 preparatory meetingrelating to Indo French Joint Working group (12th

session) held in Paris on 4th November, 2003.

xii) 16th Session of Indo � Romanian Joint Commissionmeeting on 20th October, 2003.

xiii) A meeting of Joint Working Group on �StrategicRelationship Framework� under the Indo-FrenchCooperation Programme on 21st October, 2003.

xiv) On 11th November, 2003 Inter-Ministerialpreparatory meeting in connection with Indo-Iran JointCommission meeting scheduled to be held at Tehranduring December 2003.

xv) Tenth Indo-Bangladesh TelecommunicationCoordination meeting on 11th December, 2003.

xvi) On 11th December, 2003 Inter-Ministerialpreparatory meeting regarding 3rd Session of Indo �Israel Joint Trade and Economic Committee scheduledto be held from 14-15 January, 2004 in Tel- Aviv.

xvii) On 2nd January, 2004 Inter-Ministerial meetingheld under the Chairmanship of Joint Secretary, FT,WANA (Foreign Trade, West Asia North Africa) forthe preparation of Joint Commission Meeting of the

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1st Session of Indo�Syria to be held in 5-6th February,2004 in Damascus (Syria).

xviii) 4th Project steering group (PSG) meeting of theTelecom operations Project under assistance fromCanadian International Development Agency (CIDA)on 3rd February, 2004.

xix) Tripartite Review meeting of CIDA AssistedProject held in North block under the Chairmanshipof Joint Secretary (CM), Department of EconomicAffairs, Ministry of Finance on 20th February, 2004.

xx) Meeting of the Project Implementation Committee(PIC) under assistance from Canadian IndustrialDevelopment Agency (CIDA) on 19th March, 2004.

xxi) Third meeting of the Indo-EU Joint working Groupon Information Society on 26th March, 2004. Themeeting was jointly addressed by Minister ofCommunications and IT and Commissioner forEnterprise Policy and Information Society, EU.

Visit of Ministers and other dignitaries of foreigncountries to India

i) Swedish Minister for Trade & Industry along with13 member Swedish business delegation called onHon�ble MOC & IT on 2.4.2003.

ii) Minister of Communications, South Africa,accompanied by a business delegation from Informationand Communication sector visited India from 22-28April, 2003. The visit was aimed at enhancing andconsolidating Govt.-to-Govt. relations in the area ofInformation and Communication Technologies (ICTs).

iii) A U.S.A. Delegation led by Ambassador had ameeting with Member (T), Member (S), DDG (IR)and Director (US), MEA on 4.2.2004 to discuss thenew issues emerging in the changed telecommunicationscenario. The meeting was arranged as per the requestof USA side and recommendation of Ministry ofExternal Affairs. The US delegation also had a courtesymeeting with Secretary, DOT.

iv) Second meeting of the Indo-French Joint WorkingGroup on IT and Telecom was held on 10-11 March,2004 in DIT, New Delhi. Hon�ble MOC&IT and thevisiting French Minister for Industry, Energy and

Telecommunications inaugurated the Joint WorkingGroup Session on 10th March, 2004. It was followedby the bilateral discussions on cooperation in the fieldof IT and telecom.

Visit of DOT delegation to other countries during2003-04

i) The 2003 annual session of the ITU Council washeld at Geneva during 5-16 May, 2003. An Indiandelegation led by Secretary (DOT) and comprising ofWireless Adviser and the counselor from PermanentMission of India in Geneva participated in the session.At this session, among other issues, the Indiandelegation proposed an important resolution for thepreparations of World Summit of Information Society(WSIS). This resolution was co-sponsored by manycountries including USA, Australia, Canada etc., whichis the governing body of ITU.

ii) DOT delegation led by Secretary, DOT participatedin SUPERCOMM, 2003 held from 1-5 June, 2003 atAtlanta, USA and had bilateral discussions with U.S.Coordinator for International Communication andInformation Policy for close cooperation in the future.

iii) An Indian delegation led by Wireless Adviser toGovt. of India participated in the ITU-RRadiocommunication Assembly (RA-2003) during theperiod June 2-6, 2003 at Geneva, Switzerland.

iv) An Indian delegation led by Secretary, DOTparticipated in the ITU-R World RadiocommunicationConference-2003 (WRC-2003) for the period 9 June� 4 July, 2003 at Geneva, Switzerland to review andrevise the International Radio Regulations, which applyto administrations and operators for National as wellas International Radiocommunications.

v) Five officers from DOT/BSNL/ITI were deputed toFrance from 15th June to 4th July, for training inconnection with the Pilot Project for NGN Networkand demonstration of online facilities of E10 MMSwitch.

vi) Secretary, DOT and Advisor (Technology), DOTattended the meeting of Regional Commonwealth inthe field of Communications (RCC) meeting from 29th

June to 1st July, 2003 at St. Petersburg (Russia).

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vii) Secretary, DOT and DDG (IR), DOT attendedthe Intersessional meeting of WSIS (Prep Com II- Prepcom III) from 15- 18 July, 2003 held at Paris.

viii) The official delegation led by Hon�ble MOC &IT visited Myanmar from 25-31 August, 2003 forpromoting bilateral relations in the field ofcommunication and IT between two countries.

ix) Hon�ble Minister of Communication and IT visitedKathmandu (Nepal) from 10�11 September, 2003 forpromoting Bilateral Relations in the field ofCommunication and IT and inauguration of WLL basedNetwork in Kathmandu executed by TCIL.

x) A five members� delegation led by Secretary, DOTparticipated in the 3rd Preparatory Committee meetingof WSIS from 15-26 September. Indian delegationintervened several times on substantial issues duringthe discussion on draft Declaration and Action Plandocuments and stressed for the inclusion of itemsconcerning our country and developing nations ingeneral. In addition, delegation chaired drafting groupmeetings on two subjects namely, �Cultural andlinguistic diversity� & �International and RegionalCooperation� forming part of �Declaration of Principle�document. Remarkably, the head of Indian delegationtook a leading role in salvaging the preparatorycommittee proceedings by advising the president ofpreparatory process in a constructive and practicalmanner, which was widely appreciated.

xi) Member (Technology) attended 13th Session ofIndo-Iran Joint Commission held in Tehran (Iran) underthe Chairmanship of Hon�ble Minister of ExternalAffairs (India) from 13-14 December, 2003.

xii) DDG (PG), DOT attended the 3rd Meeting of theSAARC Technical Committee on Communicationsand Transport at Islamabad (Pakistan) from 1-2December, 2003.

xiii) A delegation consisting of six officers fromMinistry of Communication & IT headed by Hon�bleMOC&IT attended the first phase of World Summiton the Information Society (WSIS) at Geneva,Switzerland from 10-12 December 2003. During thesummit Hon�ble MOC&IT delivered a policy statement.He also had bilateral meetings with his counterpartsfrom Sudan, Afghanistan, EU, Cuba & Singapore.

xiv) Second Meeting of Indo-Iran Joint Working Groupon Posts and Telecommunications was held on 24-25February, 2004 in Tehran, Iran. A six-memberdelegation led by Member (Technology) DOT attendedthe meeting from Indian side. Representatives fromTCIL, C-DOT and DOP were part of the delegation.

xv) Administrator, US Fund participated in ITUWorkshop on Internet Governance as a chairperson atGeneva, Switzerland from 25-27 February, 2004 onITU expenditure.

xvi) In addition to above, 64 officers from DOT weredeputed for participating in summit / conference /workshop / seminar / study group meetings and trainingof Asia Pacific Telecommunity (APT), InternationalTelecommunication Union (ITU) and other internationaland regional organizations as listed below: -

S. Activity No. of Place / Country of deputationNo. officers

deputed

1. ITU-T /ITU-D

& ITU-R 21 Geneva, Republic of Maldives, Italy,Korea, Brazil, Malaysia, Singapore

2. APT 15 Australia, Bangkok, Seoul (Korea) & Vietnam

3. World Tel 1 Geneva

4. WSIS 8 Geneva, Thailand

5. Misc. 19 Russia, France, Atlanta, Paris, Bangkok, Seoul, Kuala Lumpur, Kathmandu, Los Angles, London, Vietnam, China, Singapore, Iran, USA, Canada, Islamabad, Japan, Maldives

International event hosted Besides the above foreign deputation cases, DOThosted APT event on Asia Pacific Initiatives onInformative Society (AIIS) at Bangalore from 21-25July, 2003. This was inaugurated by Chairman,Telecom Commission. About 80 Foreign delegatesand 12 Indian Delegates attended this meeting.

Economic Research and Policy Planning The Economic Research Unit, a multi-disciplinaryunit consisting of economists, technocrats, statistical

16

and financial experts, provides the required inputs ontechno-economic issues relating to the telecom sector.During the year, studies on socio-economic profiles ofusers of various telecom services were got conductedcovering Karnataka, Goa, Rajasthan, four metro citiesand a few selected cities namely Lucknow, Patna,Coimbatore, Bangalore, Ludhiana, Chandigarh,Jamshedpur, Rajkot and Pune. Further similar studieshave been sponsored which are in progress.

A study sponsored on Digital Divide in Indiaconducted by Administrative Staff College of India(ASCI), Hyderabad was also finalised during the year.A workshop on Digital Divide was organised incollaboration with ASCI, Hyderabad.

Statistical Section of the Economic Research Unitcompiles and disseminates data on techno economicparameter relating to Telecom Sector. During the year,the Statistical Section brought out a comprehensivedocument �Indian Telecom Statistics� (ITS) 2004 anda pocket book on �Performance of Telecom Sector�which were well received by various stakeholders. TheSection also prepares and publishes AnnualAdministrative Report of the Department ofTelecommunications.

The performance of Telecom Sector was alsoreviewed each month at the level of TelecomCommission on the basis of review notes coveringselected telecom development parameters. Adviser(Economics) also visited VPTs, PCOs and SancharDhabas in Gujarat, Rajasthan and Maharashtra andmade useful suggestions for their improvement.

The special scheme on creation of one lakhemployment/self-employment opportunities in J&Kinitiated at the recommendation of Task Force set up

by the Prime Minister�s Office was monitored by ERU.Adviser (Economics) was nominated as the nodalofficer for this purpose to brief the committees headedby the Home Secretary & Cabinet Secretary.

The ERU also maintains a close contact with otherEconomic Departments/ Ministries of the governmentof India like Department of Economic Affairs, PlanningCommission, Central Statistical Organisation (CSO),Ministry of Industry etc.

Use of HindiDuring the period 2003-04, DOT through its Official

Language (OL) Branch followed Rules and Regulationsprescribed by the Department of Official Language.Main activities of the Department relating to progressiveuse of Hindi are as under: -

i) Acquainted all the Sections of DOT (HQ)/ OtherOffices and Public Sector Undertakings under theadministrative control of DOT with the OfficialLanguage Act, Rules and instructions issued thereunder for their compliance for achieving the targetsfixed by Official Language Department in their AnnualProgramme for the year under report.

ii) Reviewed the Quarterly Progress Report regardingprogressive use of Hindi received from all the Sectionsof DOT (HQ) and other Offices and PSUs under theadministrative control of DOT and took necessarycorrective measures in respect of those whereindiscrepancies were noticed.

iii) Officers/ officials were nominated for HindiTraining. Similarly, 15 Stenographers/17 Typists werenominated for Hindi Stenography/Typing trainingcourses.

iv) Carried out inspections of Telecom Offices/PSUsto ensure the compliance of provisions of OfficialLanguage Act/Rules and instructions issued there under.

v) As usual, Hindi Fortnight was organized from15.09.2003, which is a regular activity of every yearprescribed by Department of Official Language witha special emphasis for non-Hindi speaking employees.A Hindi workshop was also organized during thefortnight to help employees overcome hesitation incarrying out their official work in Hindi.

vi) Official Language Unit works as a co-coordinatorfrom DOT (HQ) during the course of inspection ofcircles etc. by Committees of Parliament on Official

Shri Nripendra Misra, Secretary (DOT) releasing �India TelecomStatistics 2004� at ITU Regional Workshop

17

Language, which is also a regular feature every year.During the period under review, 47 Inspections werecarried out.

vii) Translated all the documents in Hindi/Englishspecified in section 3 (3) of Official Language Act 1963including all the papers/ reports to be laid by DOT onthe table in both the Houses of Parliament.

viii) Quarterly meetings of the Departmental OfficialLanguage Implementation Committee were held atregular intervals and reviewed other offices and PSUsAgenda/Minutes.

ix) To ensure compliance of Section 3 (3) of OfficialLanguage Act, 1963, various orders were issued fromtime to time. Special emphasis has been laid to ensurepublications of advertisements in Hindi, proper andoptimum utilization of staff trained in Hindi stenographyand typing.

x) More than 80% of the employees of the Departmenthave working knowledge of Hindi and the Departmentis notified under the Rule 10(4) of the OL Rules 1976.During the year 2003-04, 271 offices under theadministrative control of this Department have also beennotified under the above Rule.

Publ ic Grievances and Redressa l

Department of Telecom receives complaints directlyin its Public Grievances Cell from the office of theMinister of Communications & IT, MPs, MLAs, VIPs,PM, Chairman�s Office, Department of AdministrativeReforms and Public Grievances (DAR & PG) and fromthe public. Public Grievances Cell of DOT monitorscomplaints for their early and timely settlements andalso implements the recommendations of Departmentof Administrative Reforms and Public Grievances(DAR&PG) from time to time.

During 2003-04, 6763 grievances were received and7259 (including B/F) were disposed off. Similar figuresfor the year 2002-03 were 8801 and 7975 respectively.

Welfare Activit ies during 2003-04

1. During the year 2003-04, a sum of Rs.14 lakh wasreleased for the Telecom Staff Welfare Board ascompared to a sum of Rs. 10.56 lakh released duringthe year 2002-03. The Department also encouraged

participation of its employees in various sports andcultural activities and competition at Regional as wellas All India Level.

2. Under the welfare programmes, scholarships wereawarded to college going children of the employees,book-awards and incentives were granted to meritoriousschool going children of the employees, conveyanceallowance/hostel subsidy was granted to mentallyretarded/ handicapped children of the employees,financial assistance extended to employees in distressand travel subsidy was given to employees forrecreational tours, etc.

3. During the year, a programme on Pranayam,Meditation and other processes to eliminate stress ofdaily routine life was arranged by Department.Department gives memento to retiring employees andprovides necessary medicines for first-aid in emergency.

4. An excursion trip to Dalhousie, Dharamshala,Chandigarh and nearby places was arranged byDepartment from 13-17 August 2003.

5. During 2003-04, financial assistance of Rs.13,000/-was given to the employees suffering from seriousdiseases as compared to Rs. 8,000/- in the previous year.

6. About ten officers of the Department were deputedfor one-day course on Medical Rescue and resuscitation,organized by National Association of Critical CareMedicine (India).

PersonnelStaff Employment

The total staff employed at the end of 2002-03 was4.14 lakh as compared to 4.16 lakh during the precedingyear. This includes staff in DOT, BSNL and MTNLand industrial workers in the Telecom Factories. Ofthese employees, 72625 belonged to the Scheduled Castesand 18515 to the Scheduled Tribes categories. Thedetailed group-wise break-up is given in the Table 8-12of the Statistical Supplement. There were 53486 womenemployees. Further, 3667 ex-servicemen (including 68Disabled) were working in the Department as on March31, 2003. Among physically handicapped personsemployed, there were 85 employees with blindness oflow vision, 50 with hearing impairment and 408employees with locomotor disability or cerebral palsy.

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19

Introduction

Centre for Development of Telematics was establishedby the Government of India in 1984 as an autonomousbody with the objective of developing a new generationof digital switching systems. Progressively the scopewas extended to include transmission access and othersoftware application projects to offer total solutionsfor the nation. Since its inception, C-DOT hasdeveloped a wide range of switching and transmissionproducts for the rural and urban applications. C-DOTMain Automatic Exchange can connect upto 40,000subscribers and supports features like IntegratedServices Digital Network (ISDN), Intelligent Network(IN), V5.X interfaces. The Medium Capacity ExchangeSBM RAX also supports all these state-of-the-artfeatures. The C-DOT Main Exchange can also functionas Mobile Switching Centre forGSM cellular service. The smallRural Automatic Exchange hasbeen developed for ruralenvironment and can work withoutair-conditioning. C-DOT has alsodeveloped an integrated TimeDivision Multiple Access - Pointto Multi-Point (TDMA-PMP) forserving 256 subscribers sparselydistributed within a radius of 20Km. Some of the other productsdeveloped by C-DOT includeATM Switch and Multiplexer,NMS for multiple Switch andTransmission equipment technologies, OpticalAmplifier, 2/8 and 2/34 OptiMUX and Compact STM-1 Synchronous Multiplexer. Network ManagementSystem, Operation support system and IN.SCP nodesare the other software intensive applications, which C-DOT has developed.

As a result of a very efficient technology transferprocess, a number of manufacturers have establisheda production capacity of seven million lines per annum. C-DOT extends pro-active support for the operationand maintenance of its products in the telecom network.

C-DOT's small capacity RAX & C-DOT SBM RAX

has been exported to a number of countries in Europe,Asia and Africa. C-DOT is also committed to safeguardthe investments made by telecom service providers inits technology by upgrading the existing systems withthe latest features throughout the life span of theequipment.

Major Achievements during the year 2003-2004

Advanced Intelligent Network Services (AIN)

" Development of major service features like SCPbased central charging, local number porting wascompleted and validated.

" Pre-paid solution for CDMA WLL subscribers ofMTNL Delhi was demonstrated.

" Commercial proposal for integratedAIN services and prepaid for WLL wassubmitted to MTNL.

" Discussions on feasibility of pre-paid IN solution for WLL systems wereinitiated with BSNL.

High Bit Rate Network Backbone onFibre & Satellite

D e n s e W a v e l e n g t h D i v i s i o nMultiplexing (DWDM) based opticalf ibre system progressed uptocommencement of testing the sub-

systems, their integration and internal lab validationof the full system.

" Intermediate Data Rate (IDR) satellite systems inthe C-band were put on field trial.

" Development of a Ku band satellite backbonesystem was initiated.

Cell & Packet Technologies for voice & DataConvergence

" Hardware of enhanced ATM switch for defenceapplication was released for fabrication of prototype.

" Basic call handling functionality of VoIP Media

II.1 Centre for Development ofTelematics (C-DOT)

20

Gateway was demonstrated in the lab as a milestonein the Internet Telephony Gateway Switch.

Innovative Services for Business & Industry

" Bulk deployment of C-DOT�s Network ManagementSystem (NMS) for local exchanges was started.

" Validation of NMS for trunk exchanges wascompleted for field trial deployment under a proposedMoU between BSNL and C-DOT.

" Development of NMS modules related to centralnetwork management, subscriber management andtransmission parameter management was initiated.

" As a part of pilot trials for nation wide usage, theFixed Short Message Service (FSMS) system wasinstalled at Kolkata.

" System capacity for handling multi-operatorinterconnect billing application was demonstrated atBSNL Bangalore and MTNL Mumbai. Functional andcapacity testing were started. Administrative approvalfor conducting field trials was obtained from BSNL.

Second & Third Generation Mobile Systems

" The development of Node B sub-system (anequivalent of base station) with single sector, singlecarrier frequency capability was completed for firstlevel lab functionality tests.

" A thorough review of the mobile project wasconducted. Wireless access, especially for ruralapplications and feasibility of migration from 3Gto next generation mobile systems was undertaken.

New study projects

" A f i x e d m o b i l econvergence terminalfeasibility study projectwas taken up. Thed e v e l o p m e n tr e q u i r e m e n t s a n darchitecture of fixedmobile convergenceterminal were studied.Th i s p ro j ec t wassupported by DIT. Thestudy was completedand its report was

presented to DIT review committee. Decision on thebudget and timing to convert this project to a full-f ledged project is under consideration.

Product & field support activities

" New developments which were completed includeNLD / ILD feature, pre-selection in multi-operatorenvironment and 8-digit local numbering, etc.

" Technology approval was obtained for STM-1optical fibre project. Its technology was transferred tothe manufacturers in the country and to Iran TelecomResearch Centre.

" New technology single base module switch isunder trial in Karnataka. TEC evaluation for PSTN,V5.2 interface and interworking test was completed atfield trial site.

" New software addressing the field requirementsof Access Node Rural Automatic exchanges wasdeveloped, validated and retrofitted at the field trialsite after obtaining TEC approval.

" Internal validation was completed for ISDN featuresof AN RAX in conjunction with C-DOT local exchangein the lab and with OCB local exchange in Bangaloretelephone network.

Campus

" While, one contract of R&D building civil constructionwas awarded in financial year 1999-2000, followed by8 contracts awarded in financial year 2002-2003, effortwas made to offset cumulative delays in the campusproject by significant work execution in financial year2003-04. In all, the balance 21 work contracts out ofthe total of 30 for R&D campus building were awarded

during financial year 2003-04. Work on thesecontracts was in full swing. Still, some delays havetaken place during the yeardue to certain unavoidablereasons.

" In order to furtherexpedite completion of thecampus project , thefollowing steps have beentaken:C-DOT Partnership Seminar on �Total Telecom Solutions�

held on 29th July, 2003

21

♦ Permit advance payments, to the extent permissibleby rules, on running bills of contractors and other stepsfor easing cash flows.

♦ Streamlined procedures for fast payment of dues tovarious agencies.

♦ Empowered nodal officer GM (Campus) to take on-the-spot contractual and financial decisions whereapplicable, to accelerate the decision making processin general.

Progress is frequently monitored at Board level,supplemented by regular onsite visits and reviews.

New Initiatives undertaken during Financial Year2003-04 to make C-DOT more market oriented

Comprehensive steps were outlined to address majorchallenges being faced by the Centre in the new telecomenvironment. The challenges include:

" A fast changing technology environment

" Shift of market focus from fixed line switchingto mobile & IP based system

" Increased price competition from Multinationals

" Reduce the duration of product development cycleand the time to market.

" High attrition rate of trained professionals to morelucrative market

" Lack of hardware support in the country forintegrated, micro-electronic, photonic and RFcomponents.

" Likely reduction in budgetary support from theGovernment.

Solutions to address these issues were deliberatedat various levels. These efforts resulted in formulationof an action plan to transform C-DOT from a fullyfunded mission oriented R&D institution to a marketoriented R&D organization. C-DOT will work withvarious strategic alliance partners and aim at generatingmuch higher internal revenue besides the governmentfunding.

The organization has been internally restructuredto ensure more accountability and responsibility.Optimum utilization and leveraging of existing resourceswithout duplication of efforts is a key part of newpolicies. Processes are being refined to furtherstreamline management and inter-relationship betweenvarious business entities. The project reviewmethodology is further strengthened by constitutinginter-group project review committees to ensure controloverruns and ensure timely delivery of projects.

Emphasis is placed on increasing marketingsensitiveness during product development. Submissionof commercial proposals to various telecom operators,setting up of pilot product demonstration for showcasingC-DOT technologies and creation of mutual workinggroups with strategic sectors for delivery of customizedproducts, form a part of the market initiative efforts.

Various seminars were held with manufacturers,operators, service providers and financial institutionsto promote C-DOT products in vertical segments.Some products have been reviewed for their marketrelevance and mid-course correction.

Visit of Afghan Delegation to C-DOT on 27th March 2003 C-DOT Seminar on �Funding for Telecom Exports� heldon 29th May 2003

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23

Role & Objectives

Telecommunications Engineering Centre (TEC) isan S&T institution in terms of instructions issued byScientific Advisory Committee to the Cabinet andworks as a part of Department of Telecommunications. Its Headquarter is at New Delhi with Regional Centresat New Delhi, Kolkata, Mumbai, Bangalore andHyderabad.

TEC�s broad role and objectives are as follows: -

� Standardisation activity and drawing up of GenericRequirements and specifications for telecom products,equipment, systems, services and networks.

� Coordination and evaluation of new products,equipment, and systems developed by all developmentagencies.

� Support to field units for local network and to TelecomCommission for the National Network Planning.

� Providing engineering support to the BSNL/MTNLin tender evaluation, trial of equipment and adoptionfor the network.

� Investigation into operational problems, methods,etc.

� Software support to operations.

� Support to field units in development of tools, testsand maintenance aids for specific problems and localsystem needs.

The specialised Groups of Telecom EngineeringCentre evolve the technical specifications and providethe required support to perform the task assigned toTEC. For according approvals, the Regional Centresof Telecom Engineering Centre located at Bangalore,Kolkata, Delhi, Hyderabad and Mumbai carryoutevaluations as per the GRs/IRs/Test Schedules.

Achievements during 2003-2004

i) During this period, 46 GRs/ IR's were issued, 74GRs revised and 37 GRs/IRs were amended and 23GRs were withdrawn. GRs issued included 2Mb/sMultiplexing Equipment, STM-1 Customer PremisesEquipment (CPE) for access network applications,Network Management System (NMS) for IP based

TAX network, 12V SMPS Power Supply for CDMAFWTs system, CDMA repeater, Broadband RAS, RadioNetwork (Base Station Controller Base TransceiverStation) of WLL System based on CDMA2000 IXstandards etc.

ii) 93 Test Schedules were prepared for GRs issued/revised.

iii) 91 Field Trials/ testing/validation including theevaluations were carried out for some of the newtechnology products in Optical, Satellite, Switchingand Radio areas.

iv) As part of on going activities, TEC was referred20 number of field problems especially on the switchingand transmission side which were looked into andattended to.

v) As a part of the technical support, 11 technicalpapers were prepared.

vi) As part of its activity for according approval, 460Type Approvals were issued for various products foruse in the DOT/ BSNL. In addition, 214 InterfaceApprovals were issued for products for interfacingwith the DOT/ BSNL network. For testing the LicensePrivate networks for coverage of their service and Pointof Interconnect, 94 Service Test Certificates wereissued.

vii) 32 DCC meetings and 51 Manufacturers forumwere conducted for various Generic Requirements.

viii) To keep the officers of TEC abreast with newdevelopments in new technologies in the TelecomSector, following were deputed for Training/Seminars& ITU/APT meetings.

(a) 67 Officers of TEC were deputed in different inservice courses/training in various Telecom TrainingCentres in India.

(b) 23 TEC Officers attended the training in differentforeign countries under World Bank Project/APT/ITUetc.

ix) Revenue as test fee collected from various vendorsduring the year 2003-04 is Rs. 9,88,42,100. The feecharged during the year 2002-03 was Rs. 13,42,06,350.

II.2 Telecom Engineering Centre (TEC)

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25

The Wireless Planning and Coordination Wingin the Department of Telecommunications dealswith the policy of spectrum management, wirelesslicensing, frequency assignments, internationalcoordination for spectrum management andadministration of Indian Telegraph Act 1885 (ITA,1885) for radio communication systems and IndianWireless Telegraphy Act 1933 (IWTA, 1933).

Performance during 2003 -2004

Review of National Frequency Allocation Plan �2002 (NFAP-2002)

The Standing Advisory Committee on RadioFrequency Allocation (SACFA) in its special meetingheld on 19th August, 2003 decided to review NFAP-2002 and constituted NFAP review Committee underthe Chairmanship of Wireless Adviser to Govt. of Indiaand comprising of SACFA members, TIFR DGShipping, TRAI and representatives from Private sector.

The spectrum requirements from all wireless usershave been obtained and tabulated in order to assess theactual requirements for variety of applications. Thefirst meeting of NFAP Review Committee was heldon 18.12.2003 and formed the working groups ofNFAP-Review Committee to examine requirementsin detail and to evolve consensus on various issues.

Based on recommendation of World RadioConference WRC(2003) as well as national priorityfor radio frequency spectrum, Review of NationalFrequency Allocation Plan (NFAP-2002) is expectedto be completed by mid 2004.

Satellite System Coordination

International coordination of satellite systems isrequired to be undertaken as per the provisions of theInternational Radio Regulations (RR) of theInternational Telecommunications Union (ITU)Coordination of frequency assignments for theindividual satellite network is necessary with satellitenetworks of other administrations for mutualcoexistence and interference-free operations of thesenetworks. The satellite coordination is a continuousprocess. Due to the increasing number of satellites in

the Geo-Stationary orbit of our interest, the activity isbecoming extremely complex as well as important.Accordingly, the national and international activitiesfor coordination and protection of Indian satellitesystems vis-à-vis existing/planned systems of othercountries were continued during 2003-2004. Detailedtechnical analysis for ensuring electromagneticcompatibility was undertaken. Bilateral satellitec o o r d i n a t i o n m e e t i n g s w i t h v a r i o u sAdministrations/Organisations of U.A.E. and Russiafor the coordination of relevant Satellite Networks atvarious orbital locations and frequency bands wereheld.

Protection of Space, Terrestrial and RadioAstronomy Services from the Satellite Networks ofother countries:

INSAT Satellite Networks

India has a large and ambitious space communicationprogramme having eight operating INSAT satellitenetworks at 48E, 55E, 74E, 83E, 93.5E and 111.5Eorbital locations which are having fixed and mobilecommunications. Television Broadcasting andmeteorological payloads in Ku-band, C-bands, includingextending C-band and S-band.

A large number of new satellite networks have beenplanned by other countries in various frequency bandsin the GSO are of interest to India and the interferencepotential from these systems to INSAT Space andTerrestrial networks was assessed/evaluated regularlyto protect our national interests. India has large numberof filings for different INSAT satellite systems at orbitallocations 48E, 50E. 51.5E, 54E, 55E, 56.5E, 63E, 67E,71E, 74E, 78E, 78E, 79E, 82E, 87E, 89E, 98E,. 100E,101E, 103E, 105E, 111.5E, 113.5E in various frequencybands in the geo-stationary arc (GSO) and non-GSOsatellites for meeting ambitious Indian spaceprogrammes, which are in various stages of coordinationwith different countries. In accordance with theprovisions of the International Radio Regulations,several actions, including detailed examination ofSpecial Sections of Weekly Circulars published by theITU, are undertaken on a continuous basis with a view

II.3 Wireless Planning andCoordination (WPC)

26

to protecting national frequency assignments andsatellite orbital positions. Action for notification ofappropriate networks will be taken after completionof coordination with concerned administrations forinternational recognition and protection

Coordination of relevant INSAT networks wascompleted through correspondence with theAdministration of Netherlands. France and USA withrespect to their relevant Satellite Networks. Operatorlevel coordination meetings were also held withPanamasat, NSS & INTELSAT for the coordinationbetween relevant INSAT and other satellite networks.

Advance Publication Information in respect ofINSAT-MET Satellite Networks at 82E, & 94E,INSAT-NAV satellite networks at 50E, 54E, 63E, 67E,76E, 78E, 87E, 98E, 100E, 48E, 55E, 74E, 83E &93.5E. INSAT-C10 satellite networks at 48E, 55E,74E, 82E, 83E, 93.5E & 111.5E and INSAT-KU 10at 48E, 55E, 74E, 82E, 83E, 92.5E & 111.5E havebeen published in the ITU weekly circulars during thisperiod.

Detailed coordination requests in respect of INSAT-MET Satellite Networks at 48E, 55E, 74E, 83E, 93.5Ehave been published in the Special Sections of the ITUweekly circulars.

Detailed coordination request in respect of extendedC band frequencies for the INSAT network at 55E hasbeen submitted to the ITU for necessary publicationin the circulars.

Administrative due diligence information in respectof INSAT-2E (74), INSAT-2E (82) and INSAT-2E(93.5) satellite networks have been submitted to ITUfor necessary publication in special section of ITUcirculars.

Notification of frequency assignments in respect ofINSAT-2E (82) and INSAT-2E (83) satellite networkshas been made to ITU for necessary recording in theMaster International Frequency Register forinternat ional recogni t ion and protect ion.

Administrative due diligence information in respectof INSAT-EK (55E), INSAT-EK (74), INSAT-EK(83), INSAT-EK (93.5) and INSAT-EKR (48), INSAT-

EKR (55E), INSAT-EKR (74), INSAT-EKR (83),INSAT-EKR(93.5) have been submitted to ITU fornecessary publication in the special section of ITUcirculars.

Additional information in respect of S band operationsfor the INSAT-2 satellite networks at 48E, 55E, 74E,83E, 93.5E and 111.5E have been submitted to ITU-BR for necessary publication in the special sectionsand for effecting coordination with concernedAdministrations.

Progress Report in respect of INSAT-ES48, INSAT-ES-55, INSAT-2M (48), INSAT-2M(55), INSAT-2M(74), INSAT-2M(83), INSAT-2M (93.5) satellitenetworks have been published in the Special Sectionof ITU circulars.

Objections have been lodged with Administrationsof Thailand, Germany, France, Turkey, China, UAE,Iran, USA, USA and Russia for their new satellitenetworks based on the analysis for likelihoodinterference to Indian Satellite Networks requestingfor further detailed coordination.

ASSL Satellite Networks

Detailed coordination requests (APS4) in respect ofprivate Indian satellite networks, viz., ASSL-1 (50E),ASSL-2 (70.5E) & ASSL-3 (81.5E) have beenpublished in the ITU weekly circulars. Coordinationhas been completed with the Administrations ofNetherlands, Sweden, Belarus and Luxemburg withrelevant satellite networks of the above Administrationsthrough correspondence.

Frequency assignment

Frequency assignment for Satellite based Services

Frequency assignments for public/captive satellitecommunication network including that of Very SmallAperture Terminal (V-SAT) networks and for othersatellite applications are examined for interference freeoperations. Frequency assignments are also made toseveral broadcasters for operation of TV up linkingearth stations from Indian soil after necessaryexamination.

27

Frequency Assignment for TerrestrialNetworks

Assignments of frequencies for terrestrial networksof government and private sector were made for varietyof applications, namely, GSM based cellular networks,radio paging, radio trunking systems, CDMA & Cor-DECT based WLL networks, point-to-point and point-to - multipoint microwave networks, etc. after necessarytechnical examinations, analysis and coordination withother wireless networks, as appropriate for establishingelectromagnetic compatibility so as to ensureinterference-free operation of all such networks.Assignments of frequencies in 1710-1885 MHz/1805-1880MHz band for fourth cellular operator at variousplaces have also been made.

International Conferences and Meetings

National preparations, participation and follow upactions for the following important InternationalConferences/Seminars and Meetings were arrangedby WPC Wing during 2003-04:

A meeting of National Preparation Committee forthe World Radiocommunication Conference, 2003(WRC-03) was held under chairmanship of JointWireless Adviser to finalise Indian proposals for WRC-03.

India participated in the ITU-R RadiocommunicationAssembly 2003 (RA-03). In the RA-03, WirelessAdviser was elected as the Vice-Chairman of the ITU-R Special Committee on Regulatory and ProceduralMatters (SCRPM) and Joint Wireless Adviser waselected as Vice-Chairman of ITU-R Study Group � Ion spectrum management.

India participated in the World RadiocommunicationConference 2003 of ITU. India submitted its proposalsto the Conference and endorsed many APT commonproposals. Most of the Indian proposals were recognisedin the Conference and were either inline with the Indianproposals or with the common proposals of APTsupported by India. The Indian delegation played thesuccessful role in the Conference and also took aleading role in harmonising the views of developingcountries on crucial issues of relevance and interest tothe developing countries.

As an elected member of ITU Council, Indiaparticipated in the 2003 Session of Council. At thisSession, among other issues, the Indian delegationproposed an important resolution for the preparationsof World Summit on Information Society (WSIS).This resolution was co-sponsored by many countriesincluding USA, Australia, Canada, etc. India alsoparticipated in the special session of ITU council inOctober 2003.

India participated in the Asia Pacific SatelliteCommunication Council (APSCC) special seminar onsatellite systems for the Indo-China at Hanoi, Vietnamand presented a paper on �Orbital registration andcoordination issues� in the Seminar, Additional sessionof the ITU�s 2003 Council at Geneva, Meetings ofITU-R Study Group�I (Spectrum Management) andits Working Parties at Geneva, ITU-R Regional(Region-3) Radiocommunication Seminar held at Jeju� do, Republic of Korea and the Asia PacificTelecommunity (APT ) Training course on Radio andBroadcasting at Seoul, Republic of Korea. During theMeeting of ITU-R Study Group-I, Joint WirelessAdviser was appointed the Chairman of Working Party1-B on spectrum management methodologies.

Automation of Spectrum Management &Monitoring System (2003-2004)

The Project Design, Supply, Installation &Commissioning of �National Radio SpectrumManagement & Monitoring System(NRSMMS)� isbeing implemented with assistance of the World Bankloan. Under the project, spectrum management andmonitoring functions will be automated with a viewto make these activities more effective and efficient.

During financial year 2003-2004, more than 90%of offshore equipments have been received. Sitepreparation and installation of equipments at fixed siteand mobile site is in progress. First phase of Trainingof Trainers (TOT) has been completed.

Wireless Monitoring Organisation

Wireless Monitoring Organisation continued toprovide technical and allied data on the basis of wirelessmonitoring observations for effective and efficient

28

radio frequency management and radio regulatoryfunctions. Performance during 2002-03 and 2003-04is given in the following table:

Particulars 2002-03 2003-04

Channel days utilized for Radio

Monitoring 8938 9366

Monitoring Assignments handled 14318 16129

No. of Wireless Stations inspected 9154 2491

No. of Radio Noise Measurements 466358 510739

No. of Wireless Transmissions monitored 164914 165590

Infringements communicated to users for

remedial action 11027 9251

Technical Assistance to users 1487 1354

No. of Officials trained 110 67

No. of courses 13 8

� Many important radio noise surveys/investigationassignments were carried out by way of mobilemonitoring during the year.� Microwave Mobile Monitoring Terminals continuedto monitor radio transmissions in microwave frequency

bands to verify emission characteristics and interferencepotential. The measurements on terrestrial microwavelinks viz. LOS systems, radars etc to ensurecompatibility are also being carried out regularly.Assistance was also being provided to the users byway of conducting noise surveys for wireless/earthstations and site selection.� A specialized Mobile Monitoring Terminal havingmonitoring capabilities up to 40 GHz is functioningwith the primary objective to monitor emissions in thesatellite communication bands.� At some Monitoring Stations, fixed/mobile directionfinding systems are being used for identifying andlocating transmitting stations.� Three newly procured VHF/UHF DF systems atInternational Wireless Monitoring Station (IWMS)Delhi, Chennai and Mumbai are operational and HFDF System at I.W.M.S., Chennai has been installedand made operational during the financial year 2003-2004.

The achievements during the year 2003-04 ascompared to that during 2002-03 in the field of RadioFrequency Spectrum Management, new frequencyassignment / licenses issued etc. were as under:

***

Particulars 2002-03 2003-04Radio Frequency Spectrum ManagementNew Radio Frequency authorized to various users 1,13,935 98532Frequency assignments intimated to Radio-communication Bureau of the ITU for registration 2203 487Radio Frequency Assigned for visits of VVIPs 30 7WPCC(Wireless Planning Coordination Committee) Meeting held 1 2SACFA (Standing Advisory Committee on Frequency Allocations) meeting held 11 10Inter-departmental meetings held 51 89Sites cleared for new wireless stations 26, 590 20181No. of special Monitoring cases 4 5Wireless Licences IssuedNo. of Import Licences Issued 879 846No. of Licences issued to new Wireless Stations 14,495 9880No. of Licences Renewed (for Wireless Stations) 39,562 25990Certificate of Proficiency (COP) Examination/LicencesNo. of COP Examination conducted 18 18No. of candidates admitted 4178 2855No. of Licences issued 1974 1488No. of Licences renewed 1488 1520No. of Licences issued to New Radio Amateur Stations 164 291No. of Licences renewed for Old Radio Amateur Stations 658 597

29

Department of Telecommunications, through itsVigilance Wing, deals with the cases of employeesworking in Department of Telecommunications (DOT),Bharat Sanchar Nigam Ltd. (BSNL) and MahanagarTelephone Nigam Ltd. (MTNL).

Important Achievements/Activities duringthe year 2003-04

Steps taken for vigi lance awareness

During the period, fifteen 5-day vigilance-trainingcourses were organized in various telecom circles inwhich 405 officers of various levels were acquaintedwith various activities relating to vigilance anddisciplinary proceedings. These trained officers willprovide a pool of officers to work as IOs, POs andVOs.

Expediting the completion of preliminaryinvestigation/ inquiries

During the whole period, the investigation into thecomplaints was closely monitored with a view toexpedite investigations for initiating action against thedelinquent officials. The oral inquiries were alsoclosely monitored. During the period, 93 inquiryreports in respect of Group �A� officers and 180 reportsin respect of Group �B� officer were received andprocessed for 2nd stage advice of CVC.

Periodical Inspections

During the period, apart from the normal inspections,the vigilance staff at various points in the telecomnetwork conducted 6787 surprise inspections andadministrative/disciplinary action was initiated whereverirregularities were noticed.

Detection of High Tech Frauds

On the basis of instructions issued from VigilanceWing of TCHQ regarding detection of various HighTech Frauds and conduction of meetings on this subject,39 cases of high-tech frauds committed by privateparties for passing international calls illegally by usingVSAT/Internet/Internet Leased line alongwith bulktelephone lines/cellular telephones/ISDN andsophisticated equipments by passing the Gateways ofVSNL were detected during the period from 1.4.2003to 31.3.2004 throughout the country. 12 persons werearrested in the said frauds. Illegal equipment used wasseized and illegal operations stopped. FIRs wereregistered with the police.

Monitoring of cases forwarded by Anti-CorruptionCell of PMO.

During the period, 2 cases received from Anti-Corruption Cell of PMO was got investigated anddisposed off.

II.4 Vigilance Activities

30

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Statistical Summary of Vigilance Activitiesduring 2002-2003 and 2003-2004

S. No. Activities 2002-03 2003-04

1. No. of complaints handled during the period 3878 3558

2. No. of officers suspended due to vigilance complaints

GOs 100 63

NGOs 105 55

3. No. of officers chargesheeted for

(a) Major penalty

GOs 242 384

NGOs 181 155

(b) Minor penalty

GOs 211 507

NGOs 187 202

4. No. of officers punished with

(a) Major penalty

GOs 58 239

NGOs 177 206

(b) Minor penalty

GOs 204 261

NGOs 170 244

5. No. of prosecution sanctions issued

GOs 67 91

NGOs 42 48

6. No. of investigation reports examined and sent to CVC

for advice (other than CBI cases) 161 174

7. No. of CBI reports referred to CVC for advice. 100 89

8. No. of officers in respect of whom Vigilance clearance issued 12056 16504

9. No. of cases (received from ACU of PMO) disposed off

after investigations 8 2

10. No. of surprise inspections carried out 5365 6787

11. No. of appeal cases settled

Group �A� 2 9

Group �B� 54 81

12. No. of adverse entry cases settled 3 5

31

Introduction

In accordance with the strategic approach of theGovernment to achieve the goals of gendermainstreaming and gender justice laid down in theNational Policy for Empowerment of Women, certainsteps have been taken by the Department of Telecomand the Public Sector Enterprises under itsadministrative control.

The Department of Telecommunications iseffectively implementing the guidelines/instructionsof the Supreme Court on prevention of sexualharassment of women at work place in all its units. Inpursuance of the orders of the apex court, it has setupa committee on the sexual harassment of women,headed by a woman.

Further, strategic steps taken for empowerment ofwomen by the Department are given below:

C-DOT

Centre for Development of Telematics (C-DOT)follows enlightened policies of women empowerment.Women employees play very important roles in all theactivities of the Centre. Presently, women constituteabout 30% of the staff in C-DOT. There are around20% women in management positions. In recognitionof the excellent contributions made to C-DOT by thewomen employees, a scheme was introduced in 1999to enable them to have a two years lien on theiremployment with C-DOT in case they were requiredto be away from their jobs for extended periods becauseof family responsibilities. All women employees whohave completed 5 years of service are eligible to availthis facility. All women employees are allowed up to135 days maternity leave extendable to 270 days. Formiscarriage/abortion, a total of 45 days leave isadmissible during the service period.

C-DOT offers residential accommodation andtransport facility to all its women employees withdifferent options that may be availed as per theindividual�s wishes. This ensures the safety and securityof all women employees of the centre. Multifunctionalallowance is admissible to the women employees in

support function jobs. Career growth opportunitiesavailable to the women employees are at par with thoseavailable to the men. C-DOT offers exclusive hostelaccommodation to the women employees.

TCIL

In TCIL, women employees are treated at par withmen in every field of activities. At the time ofrecruitment and future promotion, women areconsidered at par with other male colleagues. Womenare imparted training for their skill upgradation at paralongwith other employees. Special trainingprogrammes are also arranged for women for theirdevelopment conducted by SCOPE. Women are givendue representation in various cultural committees forcultural programme organized in the company. Womenemployees are also considered as Floor warden(s) forupkeep of floors. Prizes are given for best and 2nd

best floor wardens. Women wardens have beenrewarded under this scheme.

A committee on sexual harassment of women atworkplace is also constituted headed by a women with2/3rd of the members being women. No case of sexualharassment has been reported in TCIL.

Women employees are encouraged to participate invarious competitive events such as debate, essaycompetition, Swarachit Kavitaein and noting/drafting,organized in the company and outside along with theircounterparts

TCIL Women Welfare Samiti (TWWS) organizedthe celebration of many festivals, health camp andhealth related programmes and image building activities.TWWS is committed for the welfare and developmentof its members and ensure to achieve its objective withthe help of its members.

BSNL

BSNL employs more than 40,000 women employeesat various levels. They are retained on promotion tothe extent possible at the station where they are working.Wherever the spouse is also working, generally theyare posted at the same station. Further, action

II.5 Empowerment of Women

32

has been taken to follow the Supreme Courtguidelines on prevention of sexual harassment. Toencourage and he lp women employees ,crèches/schools/tailoring centers are beingrun/maintained by voluntary Telecom WomenOrganisations. 15% relaxation in marks is given forgetting Book Award for girl students.

MTNL

MTNL has set up a �Complaint Committee onSexual Harassment� at the workplace with a permanentNGO representative. In order to sensitize all employeesof the Corporate Office regarding gender issues, aseries of workshops are being organized through theYMCA Delhi at the behest of the Committee.

ITI

The Company has given due importance to thewelfare of Women Employees. There are 1346 womenemployees (as on 30-09-2003) in ITI. The importantwelfare amenities being provided include canteen,transport, township accommodation and medicalfacilities etc.

The major facilities being provided to the womenemployees are as follows: -

1. A separate lunchroom, rest room and also Transportfacilities are provided. A Creche has also beenestablished in the units.

2. In the light of the Supreme Court Judgment on sexualharassment in the work place, the Standing Ordersapplicable to Non-Officers have been amended in themost Units to incorporate the clause on sexualharassment and similarly the CDA Rules applicable toOfficers have also been amended.

3. Complaints Committees chaired by Women havebeen formed in all the Units. Counseling, if required,is provided by the Personnel Departments of theindividual Units. Personal grievances and inter-personal relationships, which adversely affect thefunctioning of an individual in the work place, arehandled through counseling.

4. Human Resource Development is a major thrustarea in the Company�s corporate plan. Care is takento ensure that women employees are nominated totraining programmes, which are need based.

Many women employees of ITI have been selectedfor the Shram Devi Awards in the past.

* * *

33

Summary of audit observations on the working ofDepartment of Telecommunications provided by C&AGis given as follows: -

Failure of Principal General Manager TelecomDistrict (PGMTD), Patna and General ManagerTelecom District (GMTD), Gaya to disconnecttelephone of pay phone operators after expiry of duedate of payment during the period January 1993 to July2001 resulted in non realization of revenue to the extentof Rs. 5.22 crore and loss of potential interest of Rs.2.94 crore.

(Para 2 of Report No. 5 of 2003)

Commercial

In seven exchanges of Patna Telecom District,checks prescribed for billing and accounting of sparenumbers, as provided under rules, were not followedscrupulously. This omission resulted in loss of revenueto the extent of Rs. 5.11 crore during June 1979 to June2001.

(Para 3 of Report No. 5 of 2003)

Commercial

The Chief General Manager Telecommunications(CGMT), Punjab Circle placed (April 1999) a purchaseorder on M/s Hindustan Teleprinters Limited, Chennaifor supply of 10 K New Technology ExchangeEquipment along with associated equipment. GMT,Amritsar received the equipment worth Rs. 2.98 crorein November 1999 as per the vetted material list.However, Accounts Officer, Controller of TelecomStores, Chennai made payment of Rs. 3.77 crore to thesupplier without restricting the same to actual cost ofequipment received i.e. Rs. 2.55 crore. This led toexcess payment of Rs. 1.22 crore.

(Para 20 of Report No. 5 of 2003)

Commercial

Nine circles of BSNL failed to add a clause in the

purchase order for procurement of 12 F optical fibrecable specifying that the prices would be provisionaland the lower of the two, i.e. the price fixed by BSNLHeadquarters and the one fixed by the circle, wouldbe applicable. Failure to add such a clause resulted inavoidable extra expenditure of Rs. 70.64 crore during2001-02.

(Para 39 of Report No. 5 of 2003)

Commercial

Village Public Telephones: The review revealsthat the implementation of VPT, overall, was veryunsatisfactory. While on the one hand progress wastardy and far below targets on the other hand, thedisturbing fact was that a very high proportion ofinstalled VPTs were non-functional. There were severalcases detected of unnecessary purchases and theequipment was lying unused in many cases.

The agreement with private operators initiallyprovided for cancellation of the licence in case theyfailed to fulfill their commitment. In practice, however,this clause was not enforced and the private serviceproviders were permitted to escape after paying a tokenamount of liquidated damages. As a result, thedepartment/BSNL ended up giving undue benefit tothem to the extent of Rs. 719 crore. In addition, thedepartment expended Rs. 93 crore to provide the VPTson behalf of the private operators. In case the publicsector undertakings were asked to fill the void, theexpenditure involved, as per an estimate of BSNL,would be over Rs. 600 crore on capital account, besidesannual operating costs of Rs. 330 crore.

Department procured 23,070 MARR equipmentcosting Rs. 184.56 crore during 1998 to March 2000despite directive of PMO not to procure MARRequipment.

C-DOT Point to Multi Point equipment and SolarPhoto Voltaic batteries costing Rs. 42.57 (29.14 +13.43)crore were lying unutilized as of March 2002.

II.6 Audit Observations of C&AG

34

MARR equipment costing Rs. 26.69 crore procuredby West Bengal, Rajasthan, Orissa, Gujarat, MadhyaPradesh and Chattisgarh circles were lying faulty since1998-99.

Out of 7045 VPTs provided on landlines, a testcheck revealed that 446 VPTs were faulty. Thepercentage of fault in the different SSAs varied from24 to 74 per cent. The expenditure of Rs. 22.35 croreon provision of VPTs on landlines in the Orissa circlewas rendered infructuous.

(Para 16 of Report No. 5 of 2003)

Commercial

Utilisation of Microwave Transmission Equipment: In spite of the falling trend in the requirement ofmicrowave transmission systems in the Ninth FiveYear Plan as well as the instructions of DOT, actualinstallation exceeded the target planned, while in thecase of Optical Fiber Cable and Satellite equipment,the achievements were much lower than the targetsfixed. As a result, microwave projects and equipmentremained unutilized.

Fifteen project estimates were sanctioned forinstallation and commissioning of microwaveprojects/schemes at total estimated cost of Rs. 149.05crore between 1988 and May 1999. An expenditureof Rs. 80.78 crore was incurred. The department nolonger required these systems due to operationalisationof optical fibre cable.

As a result of the availability of alternate media,the microwave systems/equipment worth Rs. 33.46crore received in respect of many schemes were lyingidle for periods ranging up to five years although thefull set of equipment was received. The delay incommissioning of these projects was due to delays atvarious stages viz., placement of purchase orders,receipt of equipment on diversion and late receipt ofequipment. Most of the equipment were in stock formore than one year and the chances of their becomingobsolete due to fast change in the transmissiontechnology is not ruled out.

No action for commissioning of the projects

sanctioned during 1991-93 was taken until 1999-2000i.e., for about 10 years. The schemes were no morerequired due to availability of alternative media. Thisresulted in avoidable expenditure of Rs. 5.12 crorespent on these projects.

Delay of over four years by DOT in placing orderfor procurement of equipment coupled with subsequentdevelopment i.e., failure of equipment, extraordinarydelay in taking final decision by DOT led to non-commissioning of the system for almost a decade afterthe sanction of the projects. This led to blocking offunds to the tune of Rs. 7.83 crore.

Six GHz wide band microwave equipment (HFCLmake) worth Rs. 4.18 crore was received in Salem inMay 2001 and installation was completed by February2002. The system could not be commissioned due toinherent defects and the Salem/Coimbatore route wasnot commissioned till June 2002. Further, 1800 metersof waveguide accessories valued at Rs. 0.22 crorereceived in April 1999 could also not be put to anyuse.

(Para 17 of Report No. 5 of 2003)

Commercial

Non-implementation of revised tariff from theprescribed date by Mumbai unit of MTNL and delayin revision of tariff by its Delhi unit resulted not onlyin loss of revenue of Rs. 18.03 crore for the periodApril 1999 to December 1999 but also in loss of interestof Rs. 5.81 crore thereon. Further, revenue of Rs. 5.55crore also remained unrealized so far on which recurringannual loss of interest suffered by MTNL is Rs. 0.60crore.

(Para 51 of Report No. 5 of 2003)

Commercial

Quality of services: MTNL has been providingvarious basic and value added services to subscribersthrough its networks in Delhi and Mumbai. In amajority of cases, there have been abnormal delaysvis-à-vis norms prescribed in providing services tosubscribers, which led to dissatisfaction and

35

inconvenience to them. Delays were especiallylong in the case of shifting of telephones, telephonetransfer to another person�s name and clearance oftelephone faults. MTNL has not even fixednorms/targets for providing certain services. Even itscomparative performance in providing services todifferent areas of Delhi varied considerably: the bestquality of service was provided to Central Area, whilethe East area received the worst. In a majority of casesthe quality of services was poor on account ofinsufficient coordination. The overall quality of variousservices provided by MTNL remained below average.

In case of Mumbai unit, the percentage of executionof OBs within the prescribed norm of 15 days increasedfrom 52 per cent in 1998-99 to 64 per cent in 1999-2000 but thereafter declined to 50 per cent in 2001-02. However, in case of Delhi unit, the percentage ofexecution of OBs within the 15 days norm increasedfrom 13 per cent in 1998-99 to 31 percent in 2000-01;it was 30 per cent in 2001-02.

In shifting of telephone connections, theperformance of Delhi and Mumbai units of MTNLwas very unsatisfactory as only 24 per cent OBs (Delhiunit) in case of �other area shifting� and nine per cent(Delhi unit) and 13 per cent (Mumbai unit) OBs incase of �local shifting� were completed within theprescribed norm. Besides, in case of all India shifting,the refund of deposits to subscribers allowed withinthe prescribed period was only in 16 per cent cases upto 27 November 2000 and in 1.2 per cent cases thereafterup to March 2002.

86 and 87 per cent of advice notes for newconnections for Data circuits and Speech circuits wereexecuted beyond the prescribed norms; the time takenextended to over 28 months and 29 months, respectively.Similarly, 58 and 87 per cent of data circuit and speechcircuit connections were shifted beyond the prescribednorms and time taken extended to over 15 months inboth the cases. Besides, 86 per cent connections ofboth these circuits were closed beyond the prescribednorm and time taken extended to over 20 months.

In percentage terms, the incidence of �Repeat

telephone faults� increased from 5.6 per 100 DirectExchange Lines (DELs) per month in 1997-98 to 6.1per 100 DELs per month in 2001-02. Further the rateof �Repeat telephone faults� per 100 stations per monthduring 2000-01 and 2001-02 remained more than twiceof the incidence permitted. Rent rebate on telephoneremaining faulty for more than 7 days and concessionin call charges of free phone service amounting to Rs.10.40 crore were not passed on to the concernedsubscribers by MTNL.

(Para 55 of Report No. 5 of 2003)Commercial

Telephone Revenue Billing: Owing to 1.74 lakh meter reading complaints during 1997-98 to 2001-02, MTNL had to give rebate to the subscribers to theextent of Rs. 3.52 crore.

Mumbai unit of MTNL failed to charge the revisedrate for leased circuits and rentals, which resulted innon/short billing of Rs. 2.53 crore to the subscribers. Of this amount, an amount of Rs. 1.47 crore had beenrecovered at the instance of audit.

In respect of ISDN connections, owing to non-updating of the system, there was short/non billing fordeposits and installation charges amounting to Rs. 9.22crore during last five years up to June 2002. Of thisamount, a sum of Rs. 0.78 crore was recovered at theinstance of Audit, the remaining amount of Rs. 8.44crore was still pending for recovery on which MTNLhas been incurring loss of interest of Rs. 0.90 crore perannum.

Despite expiry of the period within which the dueswere to be paid by the defaulting subscribers, no penalaction was taken against them as prescribed under therules. This led to locking up of telephone revenueamounting to Rs. 94.64 crore upto March 2002 onwhich MTNL would be incurring loss of interest ofRs. 10.17 crore per annum.

There was short/non billing to the extent of Rs.4.33 crore in respect of EPABX Boards and subscribershaving direct-in-dialing and primary rate accessfacilities.

36

A sum of Rs. 4.10 crore remained unrecovered due todishonoring of cheques received from the subscribers.

Irregularities in maintenance of records led tonon/short billing of Rs. 2.84 crore to the subscribersof EPABX and data circuits. Of this amount, a sumof Rs. 1.65 crore was recovered after being pointedout by audit, the remaining Rs. 1.19 crore were stillpending for recovery.

Provision of unauthorized telephone connections,non-verification of bonafide of the subscribers, delayin taking penal action as per Rules against thesubscribers of telephones on non-payment of bills bythem resulted in non-recovery of revenue of Rs. 3.69crore.

(Para 56 of Report No. 5 of 2003)Commercial

* * *

Pages

III.I Bharat Sanchar Nigam Limited 39-67

III.2 Mahanagar Telephone Nigam Limited 69-73

III.3 Indian Telephone Industries Limited 75-80

III.4 Telecommunications Consultants India Limited 81-86

37

III. PUBLIC SECTOR UNDERTAKINGS

39

III. 1. Bharat Sanchar Nigam Limited (BSNL)Highlights

� BSNL has an authorized share capital of Rs.17,500/- crore, paid up capital of Rs.12,500/- crore and networth of Rs. 55,922/- crore.

� BSNL operates the telecom services in all the circlesof the country except Mumbai and Delhi.

� BSNL has largest telecom network in the country.The total number of DELs (as on 31st March 2004) is4,16,48,546.

� During 2003-2004, a total of 34.59 lakh telephoneconnections (Net) were provided by the BSNL evenafter large-scale disconnection of 32.60 lakh DirectExchange Lines.

� Out of 6,07,491 villages in thecountry, 5,09,682 villages have beencovered with the village publictelephones (VPTs) upto March 2004by BSNL.

� BSNL has introduced cellularmobile service and mobilete lephones based on WLLtechnology in its network. There are52.54 lakh Mobile and 9.59 lakhWLL subscribers as on 31.03.2004.

� The total number of rural DELs was 122.72 lakh(about 29.47 percent of total DELs) as on 31.03.2004.

� Faults per 100 telephones per month have come downfrom 9.9 during 2002-03 to 8.5 during 2003-04.

� BSNL is an Internet Service Provider (ISP) andprovides a full range of Internet services connected tothe National Internet Backbone (NIB).

� Intelligent Service (IN) was introduced in the year1998 and provides a range of services like VPN, IndiaCalling Card etc.

� Internet Telephony Service has been introduced andthere are 11,32,045 subscribers as on 31.03.2004.

Role and Functions

Bharat Sanchar Nigam Limited (BSNL) wasformed on 1st October 2000 by corporatisation of theerstwhile Department of Telecom Services. BSNL isa 100% Govt. of India owned Public Sector Undertakingwith an authorized capital of Rs.17, 500 crore, a paidup capital of Rs.12,500 crore & a net worth of Rs.55,922crore. BSNL has one of the largest base of skilled workforce approximately 3.6 lakh and approximate annualrevenue Rs.25,800 crore for 2002-03. It is the largestPublic Sector Undertaking (PSU) in the country. Thecompany has taken over the erstwhile functions of theDepartment of Telecom in respect of provision oftelecom services across the length and breadth of thecountry. BSNL is a technology-oriented company with

a mandate of providing all types oftelecom services. This requiresprovision for all types of telephoneservices and bandwidth on demand,Internet, Long distance telecomservices, IN, data etc and provisionof at least one public telephone inevery village in the country. BSNL'scontribution to teledensity isexpected to increase from 3.99 atpresent to 5.04 by 2005 and 6.36 bythe year 2007.

also been in the forefront of technology with a 100%of digital new technology switching network. The vastswitching network has a capacity of 534.21 lakh lineswith 7,716 exchanges in urban areas and 28,902exchanges in rural areas as on 31.03.2004. BSNLnation-wide network covers all District Headquarters,Sub-Divisional Headquarters, Tehsil Headquarters andalmost all the Block Headquarters. Out of 6,07,491villages in the country, 5,09,682 villages have alreadybeen provided telephone facility by BSNL by the endof March 2004.

Telecommunications is now accepted as a basicinfrastructure along with power and transportation forgrowth of National economy. Telecommunications isalso recognized as the means for accelerating the

40

economic growth in all the regions, including remoteand inaccessible areas in the country. Telecom in themodern world is expected to usher a concept of globaleconomy and single world market place. BSNL telecomnetwork, therefore, is part of modern global network,providing access to countries around the world fortransporting information in the form of voice, data orvideo.

Vision

To provide world-class telecom services rangingfrom plain telephone service to all types of value addedservices at affordable prices while ensuring operationwith customer orientation.

BSNL is working towards the following objectives:

a) To provide the state of art technology for all typesof telecom services in the country.

b) To face the competition and excel in its operationsin the Indian/Overseas markets by developing propermarketing strategies and entering into joint ventures.

c) To emphasize customer orientation in all itsoperations.

d) To provide all types of telecom services at affordablerates in every nook and corner of the country,particularly the rural areas.

e) To fulfill the telecommunications requirements forthe growth and development of business enterprise inthe country.

An account of major activities undertaken andperformance during 2002-03 and 2003-2004 of BSNLis given below:

Bharat Sanchar Nigam Ltd. runs the telecom servicesin 26 Telecom Circles and 2 Metro Districts, whichhave 36,618 exchanges and 416.49 lakh DELs as onMarch 31, 2004.

Activities & Achievements

New Telephone Connections- During 2002-03, atotal number of 47.70 lakh new telephone connections

were provided bythe BSNL. During2003-04, a totalnumber of 34.59lakh new telephoneconnections wereprovided by theBSNL bringing thetotal number ofDELs to 416.49lakh as on March31, 2004.

Publ ic Cal lO f f i c e s -Considering thefact that telephonefacility is needed bygeneral public whocan not afford tohave a telephone oftheir own, it was decided that the accessibility shouldbe improved by providing a large number of PCOs forgeneral public. Accordingly, a total number of 11.96lakh PCOs were provided upto March 31, 2003. Duringthe year 2003-04, a total of 3,24018 PCOs have beenadded up to March 04 bringing the total to 15.20 lakhas on March 31, 2004. In the rural areas, against atarget of 39439 Village Public Telephones (VPTs),36,929 were provided during the year 2002-03. BSNL'sVPT target for the year 2003-04 was 7135 out of which4737 VPTs were provided upto 31.03.2004. As onMarch 31st, 2004 the number of villages having VPTsis 5,09,682.

Provisions of Cellular Mobile and WLL Phones- BSNL planned to provide 30 lakh Cellular connectionsin the year 2003-04. Total number of Cellularsubscribers as on March 31, 2003 was 22.56 lakh,which increased to 52.54 lakh on March 31, 2004. Inaddition to this there are 3,23,829 WLL subscribers inurban area and 6,34,963 subscribers in rural area as onMarch 31, 2004.

Telephone Services- The total number of exchanges,as on March 31, 2003 were 36,136. The equipped

(Commnic Asia Exhibition at Singapore)

41

capacity of Telephone Exchanges was 484.56 lakhlines as on March 31, 2003. 482 telephone exchangeswere added during 2003-04, bringing the total numberof exchanges to 36,618 as on 31.03.2004. The equippedcapacity as on March 31, 2004 is 534.21 lakh lines(including Fixed, WLL and CMP).

MAX-I Switching Equipment- The achievementsof MAX-I exchanges during 2002-03 and 2003-04were as follows:

Subscriber Trunk Dialing - As on March 31, 2003,there were 437 TAXs in the country. A total of 10.11lakh lines TAX capacity was added during 2002-03.The numbers of stations connected to the NationalSubscriber Dialing Network through these TAXs was31371 as on March 31, 2003.

During 2003-04, a total of 9.03 lakh lines have beenadded in BSNL network bringing the TAX capacityto 50.25 lakh lines. The number of BSNL TAXs as onMarch 31, 2004 is 496.

All states are having STD on reliable media, i.e.,OFC, Microwave or Satcom.

STD Stations - The direct dialing facility is veryuseful for accessing distant stations instantly. The

BSNL has, therefore, been constantly increasing thenumber of STD stations in the country. It was decidedto increase the number of NSD/STD stations at a fasterrate and accordingly 2008 new stations were addedduring 2002-03. There were 31371 NSD/STD stationsin the country as on March 31, 2003. During2003-04, 296 new stations have been connected toBSNL TAX network bringing the total number ofstations connected on STD to 31667.

Transmission Systems � 8085 RKMs of microwavesystems were added during the year 2002-03. Against

Type Actual Achievements Actual Achievements

During 2002-03 During 2003-04

Gross Net Gross Net

Ext. Large 27,72,265 24,37,551 10,89,917 8,73,113

E-10B 2,03,244 -1,87,042 1,31,179 -90,557

CDOTXL/L 28,72,965 25,92,573 6,24,713 3,85,723

Conversion to - - 17,87,722 17,86,722

MAX-I/AN RAXs

S&M Switches - - 3,53,558 -17,99,768

Scrapped 0 -33,300 - -1,25,888

DLC 6,656 5,760 3,95,510 3,11,786

TOTAL 58,55,130 48,15,542 43,82,599 13,41,131

WLL 2,96,500 2,96,500 14,70,500 14,70,500

(Inauguration of OFC Route by Maj. Gen. B. C. Khanduri in Uttranchal)

42

the target of 2000 RKMs during 2003-04 for microwave,3269.8 RKMs have been achieved upto March 31,2004. Further 75,812 RKMs of Optical Fibre wascommissioned during 2002-03 & 35,392.46 RKMs ofOFC has been commissioned during 2003-04 againstthe target of 35,000 RKMs for the year 2003-04. Thetotal OFC route now stands at 4,37,475 RKMs.

Rural Telephony

(a) Coverage: 5,04,945 VPTs were provided uptoMarch 31, 2003. During the year 2003-2004, the targetwas to cover 7,135 villages out of which 4,737 villageswere covered bringing the total to 5,09,682 villages.To provide village public telephones (VPTs) in allvillages, new technologies such as Wireless in LocalLoop (WLL), and Satellite based telephones for remoteand inaccessible village are being used in addition tolandlines.

During 2002-03, 22.56 lakh rural DELs wereprovided. The target of providing telephone lines inrural areas for 2003-04 was 8.61 lakh against which8.65(incl. WLL rural) lakh DELs were provided. Therewere 28,585 exchanges as on March 31, 2003 in ruralarea and 317 nos. of new rural exchanges have beenadded upto March 31, 2004. The total number of ruralDELs as on March 31, 2004 was 112.72 lakh.

(b) New Technology options- With the economic,social and educational developments in rural areas,large number of people in rural and remote areas arecoming forward to subscribe for telephones in spite ofavailable/planned VPTs/PCOs. In order to cope upwith the demand of both Direct Exchange Lines (DELs)and Village Public Telephones (VPTs), Switchingsystems of varied capacity i.e. 256/512/1000/1400 linesintegrated with under-ground cables, WLL systems,medium capacity satellite systems and radio systemsare planned. Stand alone single channel satelliteterminals are also proposed for VPTs. The specifictechnologies proposed to be deployed are as under:

(i) Wireless in Local Loop (WLL)- This is a fullywireless technology for the access network to provideWireless telephone connections in urban as well asrural areas. The coverage range of this technology isabout 25 Kms depending upon line of sight condition.

It is planned to provide at least one system in eachSDCA of the country. The system is used for providinglimited mobility within the SDCA as per the DOTguidelines and for providing VPTs and scattered demandof telephones in rural areas. Nonfunctional MARRbased VPTs may also be replaced by such systems.Such systems are more reliable and efficient as no wireline/copper cable is used in providing telephoneconnections.

(ii) Satellite based VPT- Villages in remote and isolatedplaces which can not be covered by any terrestrialmeans are proposed to be provided with telecom facilityusing satellite based VPTs. 16,485 VPTs are plannedto be provided subject to availability of funds from theGovt.

Status of Telecom Services

The status of telecommunication services as indicatedby various service parameters is given below:

2002-03 2003-04

A) Additions

Direct Exchange Lines 22.12 -2.50(Lakh Lines)(Wired)

Net Equipped Capacity 38.64 13.05(Lakh Lines)(Fixed)

B) Accessibility As on 31st March

of Terminating Year

Direct Exchange Lines Working 381.89 416.49(Lakh)

C) Status as on 31st March

of Terminating Year

Trunk Automatic Exchanges (Nos.) 437 496

Computerized Directory Enquiry 331 333 (Number of SSAs)

Computerized Fault Repair Service 8062 8878(No of Exch.)

Total Public Telephones 1195668 1519686(PCO) (Nos.)

Telephone facility in villages 504945 509682(Nos.)

District H.Q. provided with 593/593 598/598STD facility (Nos.)

43

Performance Parameters

Telegraph Services

As on March 31, 2004, there are 106 CentralTelegraph Offices (CTOs), 860 Telegraph Offices(TOs), 800 Telecom Centres and 30,004 CombinedOffices. Circle-wise position of these offices is givenat Table-4 of the statistical supplement.

Telegraph Network Modernisation:

There are 388 message-switching systems in theTelegraph Network. The details are as follow:

1. Store and forward message switching system:

128 Lines -------- 10 Nos

64 Lines---------- 13 Nos. and

32 lines -----------24 Nos.

2. Formatted Terminal concentrators- 25 Nos

3. Electronic Key Board Concentrators- 316 Nos.

National Telegraph Message Switching Networkfacilitates the speedy transmission and reception oftelegram throughout the country, eliminating the transitdelay.

Quality of Services- The quality of Telegraph Serviceshas been maintained consistently at high level. This ismeasured in percentage with respect to number oftelegrams delivered in 12-day light hours. The efficiencyachieved during 2002-03 was 97.3% against the targetof 97% & efficiency achieved during the year 2003-04 is 97% against the target 97%.

Franchising of Telegraph Services - Delivery ofTelegrams has been franchised through reputed STDPT Operators from the month of July 2003 to providebetter access to customers. The results of experimentare under evaluation.

Particulars of Bureau fax - This service providestransfer of documents with door delivery facilities aswell as delivery at the distant fax machines. There are1,427 Fax Centers and Traffic and Revenue for theyear 2003-04 is furnished below: -

Total documents booked 11,64,220

Revenue earned Rs. 3,88,05,069.00

Total documents delivered 1,97,087(manual delivery)

Total Revenue 17,45,693.00

Total Bureau fax Revenue Rs. 4,05,50,762.00

Experimentation of Internet-Telegrams - The aboveexperimentation of transmission/reception of telegramson Internet is working in Tumkur, Mysore andBangalore SSAs of Karnataka Circle since December2003 on live traffic. Tamilnadu Circle has also beenpermitted for the same.

New Technologies

New technologies are being adopted to expand andstrengthen the telecom services in the country. A briefon these technologies is given below:

Very Small Aperture Terminals (VSATs)

The exchanges which cannot be connected usingOF cable or Microwave are connected using satellitebased Multi-channel Per Carrier (MCPC) VSATs.

(CMD BSNL & CEO Sri Lanka Telecom signing MOU for IDD Services& IP oriented services at New Delhi.)

Activity 2002-03 2003 -04

Faults/100 station/month 9.9 8.5

(Telephone) Trunk Efficiency (%) 86.7 88.4

44

Such exchanges are mostly located in remote, hillyand inaccessible areas including islands and are havinglow volume of traffic. One MCPC-VSAT is capableof providing 7 or 10 channels. The 10-channel MCPCequipment also supports Internet operation at 9.6 Kbpsor lower data rate.

As on March 31, 2004, total 309 MCPC systemsare working in the Network. Due to up-gradation ofmedia, some of the MCPC-VSATs have been closedor diverted to other places. Therefore, the cumulativefigures as on 31.3.04 is lower than last year's figure.There is no further plan to deploy MCPC in the networkdue to its low capacity. The existing systems are tobe up-graded by IDR systems depending on the trafficrequirement, and closed systems will be redeployedon need basis.

IDR Systems: Intermediate Data Rate (IDR) systemsare deployed to provide higher channel capacity of 2MB (30 Channel) and 8 MB (120 channel) via Satelliteearth stations. During the year 2003-04, 8 number of2 MB and 1 number of 8 MB IDR routes werecommissioned. Presently, the IDR systems are beingdeployed in C-Band and in future, Ku-Band IDRsystems will also be deployed. As on March 31, 2004,57 number of 2 MB & 14 Number of 8 MB IDRsystems are working in the Network. The capacity ofthe IDR is being further enhanced to 5 or 10 times bydeploying DCME (Digital Circuit MultiplicationEquipment). The deployment of the DCME also savesthe bandwidth of space segment, which is a scarceresource. So far, DCME has been deployed in 30routes, and purchase order for 34 routes has been issuedin March, 2004.

Access Network: In order to provide broadband access,BSNL has planned to provide Overlay Optical FibreAccess (OAN) Network in cities having exchangecapacity more than one lakh lines. The Access Networkwill facilitate provision of optical fibre to home,Broadband Internet Access, Metropolitan Networks(MAN) etc. In the first phase, the work has been takenup at Bangalore, Mangalore, Chennai, Coimbatore,Ernakulam, Calicut, Trivandrum, Hyderabad, Kolkata,Jaipur, and is expected to be completed by March 2005.In the second phase, OAN has been planned in another

43 cities.

LMDS: The Local Multi-Point Distribution System(LMDS) is a broadband wireless access technologyplanned to be deployed in BSNL network as a part ofaccess network. The system is capable of transportingall types of the traffic viz. voice, data, video, IP &ISDN etc. These systems are suitable to extend thebandwidth from the transmission centres/localexchanges to the customer premises, using line of sightpoint to multi point radio technology. BSNL is havingplan to deploy the LMDS in two phases. In the firstphase 10 major cities i.e. Delhi, Kolkata, Mumbai,Chennai, Bangalore, Hyderabad, Pune, Ahmedabad,Gurgaon & Noida are being covered. At present, theequipment is under validation at Kolkata. In the secondphase, it will be deployed in other important majorcities depending on requirement.

DWDM: In order to provide bandwidth on demand,BSNL has deployed high capacity (80 Gbps) DenseWavelength Division Multiplex (DWDM) systems in16 routes through out the country. To further augmentthe bandwidth requirement, 15 new DWDM routeshave been planned in 2004-05.

INTERNET SERVICE

Activities & Achievements for the Period April 1,2003 to March 31, 2004:

� New dial up Connections 336478

� CLI Based Account less Internet Service 333370

� Total Internet Connections given in this year 669848

� No of Cities where CLI made operational 28

� Internet Leased Line Customers Added 156

� MPLS VPN Services - 26 Customers spread 268 over cities.

� Scratch Card based On Line Registration - 252 cities.

[2] ISDN:

� Number of Cities increased from 599 to 624

� ISDN BRA connections increased from 40,642 to 46,308

� ISDN PRA connections increased from 1,141 to 1,318

[3] INTELLIGENT NETWORK:

� Total Number of Cities / Towns increased from 561 to 578

� 5,911 IN PCOs opened

� PO has been placed on M/s ALCATEL for supply offive numbers of new technology IN Platforms to be locatedat Kolkata, Bangalore, Lucknow, Ahmedabad & Hyderabad.Equipment have been supplied at all the locations. ValidationTesting is in progress at Kolkata & Hyderabad. Theinstallation at other places is in progress.

Digital Loop Carrier (DLC) Systems- The DLC isan important step towards fiber in local loop, whichresults in significant saving in copper cable. This ischeaper as compared to the copper connection andnetwork reliability is ensured. During 2003-04, thecapacity added from DLC is 2,03,768 lines.

Information Technology- With a view to improvequality of the service to customers of BSNL, 8,062exchanges were computerized for providing FaultRepair Service (FRS), 331 SSAs were computerizedfor Directory Enquiry (DQ) and Integrated Packagesincluding DOTSOFT were implemented in 126 SSAsupto March 31, 2003. Also National Directory enquiryon Internet has been published on the web by all 24Circles and 2 Metro Districts. Implementation of NDQsystem for accessing NDQ by 183 positions has beencompleted in 266 SSAs. 41 call centres have beencommissioned by March 2004.

The Status of Computerization of Customer Serviceson March 31, 2004 is shown in the table below.

Management Information System (MIS) andNetwork Management (NM)

MIS Cell prepares various time boundmonthly/annual output reports for the top managementof BSNL, Minister of Communications, Chairman,Members, Advisors, functional heads at TCHQ, Boardof Directors and Chairman-cum-Managing Director ofBSNL and CGMs of the field units. These reports arehelpful in taking timely decisions by the topmanagement and functional heads for achieving thetargets and for improving service performance in respectof maintenance, development and financial aspect ofthe organization. In addition to this, the compiled dataare used as reference material for other reports.

The NM Cell coordinates with various field units,regarding disposal of STD complaints from public/VIPs. It also coordinates with field units for setting up andmaintenance of Network Management systems for longdistance telephone network. Presently, two NetworkManagement systems for telephone traffic monitoringof various TAXs and transmission system are functionalin Southern Telecom Region. Network Management

45

System Total Status as on31.03.2004

Directory Enquiry 333 333 Telecom Districts Telecom Districts

Fault Repair Service 10377 exchanges 8878 Exchanges(Demand 1000lines & above)

Computerized Billing 333 billing units 333 billing units(In-house and agency basis)

Integrated Package 333 139Telecom Districts Telecom Districts

National Directory 24 Circles 24 CirclesEnquiry on Internet & 2 Metros & 2 Metros

Access of NDQ on Internet 333 266 SSAsby 183 position Telecom Districts

Call Center 24 Circles 41

& 2 Metros

46

system have also been set up at New Delhi, Mumbaiand Kolkata for monitoring of TAXs and transmissionsystems of Northern, Western and Eastern Telecomregions respectively. One National NetworkManagement and Surveillance System has also beencommissioned at New Delhi. NM Cell also issuesguidelines/clarifications regarding routing includingHigh Usage and alternative routing of telephone callsto field units.

Material Management and Stores

Material Management Cell is looking after theprocurement of Switching & Transmission Equipments,PIJF Cable Optical Fibre Cables and new technologyequipments like WLL CDMA, DXC, DWDM, ADSLetc. and allocation of line materials, Power Plant,Batteries, supply of A&B items manufactured byTelecom Factories to Circles. It is also liasioning withthe Planning/Maintenance Cells to obtain the Circle-wise requirement and issues allotments to Circles/CGMTS, Kolkata in respect of non-decentralized items.Processing of Purchase Proposals of Cables and othernon-decentralized items exceeding the powers of CGMTS, Kolkata is done by the Cell.

Inventory Control relating to items of External Plant(PIJF U/G Cable, L&W and A&B Stores), monitoringof supplies and review of procurement, placement ofAPOs in respect of Cables and authorizing the Circlesto place purchase orders, placement of EducationalOrders for vendor base development, allocation ofLJUs to Telecom Circles, monitoring the supply andprice of EPBTs procured by Circles, monitoring theprocurement of decentralized items, procurement ofTelecom Equipments by MMT Section through Tenderswhich includes examination of proposals received fromPlanning Cell, issue of Tenders, issue of clarificationsand amendments to tender document, opening of tendersin presence of vendors and evaluation of tender etc.are some other functions performed by the materialsmanagement cell.

Civil & Electrical Works of BSNL

The Civil & Electrical Wings came into existencein the year 1963 in the erstwhile P&T Department.

These are responsible for providing and maintainingthe building and services infrastructure for the BSNL. The activities include planning and execution of thefollowing:

1. Technical buildings for housing Telecom Equipment

2. Administrative Offices

3. Staff Quarters

4. External Plant Network facilities like cable /OFC ducts

5. Civil Works for Transmission Towers

6. Telecom Training Centres

7. Rehabilitation and Retrofitting of distressedstructures

8. Environmental works

9. Interior works

10. Air conditioning

11. Substations/Engine Alternator

12. Fire detection and extinction systems

13. Internal/external Electrification.

Civil Works

The activities of the Civil Wing have increasedmanifold over the years. The workload of the CivilWing has progressively increased from a mereRs.4 crore in the year 1963 to 800 crore (CivilConstruction and Maintenance) in the financial year2002-03. In order to cater to the stringent requirementof high Technology telecom equipment, the Civil Wingis constantly upgrading the technology of design,construction, air conditioning and other systems installedin the buildings. Concept of Microprocessor Controlledintelligent building systems has been introduced tocreate state of the art infrastructure. It has also takenup erection of towers for WLL/Mobile services atvarious places. Civil Wing has also progressively

47

computerized various activities of design, estimation,tender evaluation, project management and land &building records etc. The Civil Wing comprises threedisciplines viz. Civil, Electrical and Architecture. Allthese three disciplines provide inputs for planning andconstruction of a building project. Each discipline isheaded by a Sr. DDG in the headquarter reporting toDirector (Planning & NS) BSNL. The field set up isheaded by Principal Chief Engineers located at variousplaces.

The physical achievement of the Civil Wing duringthe period 2002-03 and 2003-04 is furnished below:

Electrical Works

The Electrical Wing is providing supporting servicesto the Telecom Network and is mainly responsible forinstallation, operation and maintenance of all theelectrical and electro-mechanical services like internalelectrification, AC plants, diesel generator sets, Sub-stations, Lifts, Fire fighting and fire detection systemsetc. in the Telecom Technical and Administrativebuildings and Staff quarters of the Bharat SancharNigam Ltd. In physical terms, during the year2003-04, a capacity of 20,860 TR of Air conditioning,45,242 KVA of sub-stations 85,613 KVA of dieselgenerator sets, 33 Lifts and 1,493 jobs of fire detectionwere completed.

Financial Performance of BSNL

The assets and liabilities of the erstwhile DTS/DTOstand transferred to Bharat Sanchar Nigam Limited

w.e.f. October 1, 2000. The assets (fixed assets, CWIP& Inventory) taken over by BSNL as on October 1,2000 have been valued at Rs. 61,044 crore, whichconsist of equity of Rs. 5,000 crore, Rs. 7,500 crorepreference equity, Rs. 7,500 crore government loan,Rs. 3,056 crore loan from MTNL and surplus is Rs.37,988 crore as reserve. After the corporatisation, thecompany has to bear extra financial burden on accountof corporate tax, license fee, spectrum charges, salestax, excise duty and dividend. BSNL is also a majoroperator for providing VPTs and rural connections,which are uneconomical but socially desirable andgenerally affect adversely the financial position of thecompany. In terms of a Government decision tocompensate BSNL for undertaking uneconomicaltelephone connections, a package of financial measuresis considered. The package, inter-alia, includesmoratorium on loan and interest thereon and exemptionfrom payment of dividend on equity. However, licensefee and spectrum changes are payable by BSNL fromthe year 2004-05, which is to be reimbursed towardsoperational losses on rural telephony. The actualrevenue receipts of BSNL for 2002-03 wasRs. 25,893 crore as against estimated revenue receiptsof Rs. 23,861 crore.

TELECOM QUALITY ASSURANCE

The Telecom Quality Assurance organization ofBSNL was formed in 1979 as a part of Technical andDevelopment Circle but later became an independentCircle in 1986. The Telecom Quality Assurance (TQA)Circle has been one of the most vital organizationscovering all the aspects of quality assurancework, thereby enabling standardization and uniformityof approach and procedure. It is entrusted withthe responsibility of assuring the quality of widerange of products and equipment inducted intoTelecom Network. To carryout the above work, theTelecom Quality Assurance Circle with headquartersat Bangalore, functions with 70 Quality AssuranceCenters located al l over India and twoApex Laboratories namely the Telecom TestingLaboratory (TTL) and Component Approval Centrefor Telecom (CACT) are functioning at Bangalore.The TTL has three branches at Hyderabad, Kolkataand New Delhi.

Sl. Type of Bldg/ No. of Bldg/ No. of Bldg/No. Duct/OFC Duct/OFC Duct/OFC

completed during planned 2002-03 during 2003-04

1 Technical 1083 948

2 Administrative 38 82

3 Others 603 305

4 Cable Duct 107 Kms 51.4 Kms

5 OFC 1125 Kms 1250 Kms

6 Staff Quarters 2529 2854

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Actual achievements of Telecom QA Circle from 01.04.03 to 31.03.04

Activities of CACT from 01.04.03 to 31.03.2004

Sl. Description Achievements from 01.04.03No. to 31.03.2004

1 Value of stores accepted Rs. 3352 Crore

2 No. of Type Approvals issued 124

3 No. of Infrastructure Assessments carried outa) TEC Products 120

b) TQA Products 61

4 No. of AISs Accorded / renewed 9 renewed

5 No. of DISs Accorded / renewed -NIL-

6 No. of Production Qualification Tests carried out 2197 QA Centres a) Opened 2

b) Closed 2

8 Working strength as on 31-12-2003 1802

9 No. of seminars / meetings / work shops conducted by QA -NIL-10 No. of seminars / meetings / work shops conducted

by external agencies & attended by QA 211 Expenditure incurred towards a) Capital works & Rs. 2.1081 Crore

b) Non Plan expenditure Rs. 18.528 Crore

Sl. Description Achievements from 01.04.03No. to 31.03.20041 Augmentation facilities provided i) Thermal Stability & Cold Bend test

facilities Machines provided & installed at TTLs at New Delhi Hyderabad & Kolkata.

ii) Accelerated UV weathering tester installed

iii) Computer Networking done with 14 new computers and other peripherals.

2 No. of Components Type Approved 1715

3 No. of Components Manufacturers

Infrastructures assessed 22

4 No. of Components tested at various Labs. 11646

5 No. of products subjected to Climatic &

Environmental tests 521

6 Total Chamber hours utilised for

tests in E & C Lab 13042

7 No. of devices subjected to Failure Analysis 10

8 No. of Cases received from various QA

Centres for Surveillance tests 600

9 No. of Bill of Material / Adhoc approvals issued 29

10 Testing charging collected (BSNL) revenue) Rs. 40,57,825/-

49

Telecom Factories

BSNL Factories located at Kolkata, Gopalpur,Kharagpur, Jabalpur, Bhilai, Richhai and Mumbai arein-house manufacturing units. They are presentlyengaged in production of line materials, Coin Box PayPhones, CD Cabinet, CT Box, DP Box, Line Jack Unit,Main Distribution Frame, Modems, Tubes, Towersand SS Drop wire etc. In the changed telecom scenario,

it is the endeavor of the Telecom Factories to ventureinto new technology areas and support BSNL asmanufacturing-cum-service support organization.

During 2003-04, production output of factoriesreduced from Rs. 191 crore of previous year toRs.155.29 crore mainly due to reduction in demand ofconventional items.

During the year 2003-04, performance of BSNL Factories is as follows:

Sl. No. Telecom Factory Target 2003-04 Achievement 2003-041. Alipore 22 25.952. Gopalpur 23 24.223. Kharagpur 10 9.564. Jabalpur 37 34.075. Bhilai 11 12.176. Richhai 24 19.487. Mumbai 34 29.81

Total 161 155.29

Financial Performance(Rs. in Crore)

(All qty. in nos. unless specified)

Sl. Item Target 2003-04 Achievement 2003-04No.1 Bracket Channel Iron 4W 110500 1182752 Buttinski Telephone 27500 197033 Coin Box Telephone 2900 9614 C. D. Cabinets 1360 11445 CT Box 100 Pr 73000 745196 DP Box 1448350 14906607 Line Jack unit 1584000 15007098 MDF 512 Ports 90 909 Towers 1118 111410 Saddle A & B 158000 15759911 Socket B 177000 16710212 Sole Plate B & C 31000 3124513 Tubes 431000 36203014 Repair of cards 45000 3172615 SS Drop Wire (In Km.) 93500 7731116 Mini pillar/MPJ Box 15000 1504517 OFC ACCESSORIESa SJC/BJC 18000 13175b FDF 6000 808c OFTB 6000 1381d Pig Tail 72000 45152e Patch Cord 30000 16211f Tool Kit 300 189

In their endeavor to diversify Telecom Factorieshave to venture into new technology areas and supportBSNL as manufacturing-cum-service supportorganization, following activities were taken up during2003-04:

(i) Telecom Factory Mumbai took up themanufacturing of IN PCO and started repair of SMPSPower Plant. Factory would supply Patch PanelAntenna & FDMS during 2004-05.

(ii) Service Support Centres (SSCs) for repair ofC-DOT / E � 10 B Cards and other products of factoriesare functional at Gopalpur (Kolkata), Lucknow,Mumbai, Jabalpur, Bhilai, Jaipur, Bangalore andVijayawada.

Efforts are on to add new products like CDMAhandsets, GSM SIM Cards, VRLA batteries, SMSPhones, ADSL Modems etc.

Training Infrastructure

BSNL is having 45 Training Centres comprising ofthree apex level training centers namely AdvancedLevel Technical Training Centres (ALTTC), Ghaziabad,Bharat Ratna Bhim Rao Ambedkar Institute ofTechnical Training (BRBRAITT), Jabalpur, andNational Academy of Telecom Finance & Management(NATFM), Hyderabad, 15 RTTCs and 27 CTTCs /DTTCs spread all over the country to cater the training

needs of its employees.

During the year 2003-04, the following number ofpersonnel has been trained: -

Regulatory Measures

The details of achievements, activities andperformance during the year 2003-04 is as under:

1. Revised IUC Regime issued by TRAI andpreparation made for its implementation in BSNL'snetwork.

2. Interconnect agreements formalized with all privateoperators and interconnection established with almostall the private operators in all service areas.

3. Interim orders obtained from Hon'ble SupremeCourt against Hon'ble Supreme Court Judgment of4.2.2003 prescribing Sales Tax on Telecom Services.

4. Providing conductive regulatory environment forgrowth of BSNL services including cellular servicesof BSNL.

Training of Officers abroad

50

Staff Strength: (As on 01.04.2004)

Sl. Category Working StrengthNo.

Alipore Gopalpur Kharagpur Jabalpur Bhilai Richhai Mumbai Total

1. Group �A� 13 2 5 12 5 7 15 592. Group �B� 42 18 9 50 13 33 65 2413. Group �C� 215 22 27 129 19 37 179 6174. Group �D� 100 4 22 103 32 53 81 3955. Industrial 728 201 230 593 138 394 815 3099

Total 1098 247 293 887 207 524 1155 4411

Induction & Behavioural & Attitudinal Trained by In Service Training for Gr. �C� Staff ExternalTraining Agency within

India

65,396 25,546 141

sent abroad for various trainings / seminars/ workshopsetc in the latest equipments & trends inTelecommunications. In addition, 82 officers were sentfor exhibition/meetings/conference to have first handinformation on latest developments in Telecom field.

Departmental Examination

During 2003-04, the departmental examinations toconsider promotion of the serving employees of theCorporations/DOT were held. Results of some of theseexaminations and the examinations held in previousyear were also declared. Important among them arethe JAO Part II examination and TES Gr. �B�examination. More than 10,000 candidates appearedin the TES Gr. �B� examination.

Results of the promotion to TES Gr. �B� (25% quota)exam held last year (2002) were declared during thisyear. Here also the total number of candidates crossed10,000. This examination was a significant examinationbecause it was held after a few years due to wranglesof litigation and catered to vacancies of 5 years.

The birth of BSNL as a Corporation necessitateddirect recruitment exams also. A direct recruitmentexamination for the post of JAO was conducted thisyear in which about 25,000 candidates participated.The results of this exam were declared within 3 months.

Another significant exam conducted during the yearwas Limited Internal Competitive Examination forJunior Hindi Translators, held for the first time.

Many Court cases relating to examinations / resultswere defended during the period. Action was initiatedto file SLPs against High Court judgments involvingpolicy matter. Clarifications were offered whereverrequested for by the Circle Office.

Work Study, Efficiency Bureau & Inspection

Activities during 2003-04

i) Administrative Inspections of Telecom Circles,Telecom Districts, Telecom Regions/Functional Unitstotaling 42 were conducted during year 2003-04.

ii) Amendment in the Questionnaire of Inspection.

iii) Two Heads of Telecom Circle Conference wereconducted during 2003-04 in the month May 2003 andOctober 2003.

iv) Compendium on Delegation of Financial Powerfor BSNL officers (1.10.2000 to 30.9.2003) issued toall BSNL Circles / BSNL CO Units.

v) Total 13 orders for delegation of financial powersissued during the year 2003-04.

vi) Two Vetting Committee meeting held during theyear 2003-04 in connection with implementation ofthe work study reports for evolution of norms for (i)Sr. TOAs (P) and SDEs working in the ComputerizedDirectory (197) and (ii) Sr. TOA (P) working in theTrunk Exchanges limited to CTTMX & CTMX.

Welfare And Sports Section

Staff Welfare

A variety of welfare programmes are available tothe BSNL staff, viz. grant of book award and scholarshipto the awards of employees, financial assistance to theemployees and their family members in distress,immediate cash assistance to the nearest relative ofsuch employees who die in harness, victims of naturalcalamities, running of crèches by TWCO, grant ofconveyance allowance to the physically handicappedwards of the employees, arranging excursion trips forthe employees and their family, etc. During the year2003-04, an amount of approximately Rs. 8.31 crore(out of total budget provision of Rs. 8 crore plus thecarried over balance of Rs. 0.91 crore) has beendisbursed to the Circles for carrying out these welfareactivities.

Sports and Cultural activities

Regional and all India Sports Meets in 17 disciplinesand one Cultural Meet are conducted every year as pera sports calendar drawn up before the commencementof the year. The BSNL Sports & Cultural Board is alsoaffiliated to National Sports Federations in 11 games,namely Cycling, Table Tennis, Body Building, Carrom,Volley Ball, Kabaddi, Chess, Weightlifting,Powerlifting, Badminton and Athletics. Apart from

51

this, the Board is also affiliated to the All India PublicSector Sports Control Board. The BSNL teamparticipates in all the national level sports competitionsas well as the competition organized by AIPSSCB inthese games.

In the year 2003-04, the All India sports meet in 16disciplines of sports and one cultural meet have beenconducted by the respective Circles. The BSNL Sports& Cultural Board decided to drop the game of Wrestlingfrom the list of sports in which the all India levelcompetitions are held. For organizing all the sportsevents and cultural meet, a total grant of approximatelyRs. 80 Lakh have been released to the Circle Sports &Cultural Boards. In addition, Sports grant of approx.Rs. 50 lakh has been released to 23 Circles Sports &Cultural Boards for regional meets and other sportsactivities. BSNL Sports & Cultural Board spent aboutRs. 3.00 Lakh in participation of various BSNL teamsin National level/Inter-PSU tournaments andaffiliation/annual fees of various sports federations.

With a view to promote sports in the BSNL, it hasbeen decided to start recruitment initially in the 10sports. The recruitment is to be done by the Circles atthe rate of 5 sportspersons per circle per year for threeyears starting 2002-03. A total of 31 sports persons ofdifferent games have been so far been recruited bydifferent circles in various group D equivalent posts.In addition, 19 outstanding sportspersons have beenapproved by the Management Committee of BSNL

Board for recruitment against Group C posts inrelaxation of normal educational qualifications requiredfor these posts.

BSNL Kabaddi team, which participated in theNational Kabaddi Tournament in Goa in the month ofDecember 2003, reached upto the quarterfinals whereit lost to Services who ultimately won theChampionship. In the National Championships forCarrom, the BSNL team won third position in VeteranWoman and reached upto quarterfinals in individualMen�s section. In the Inter- PSU Badminton tournament,the BSNL Woman team was runner up and in the Inter-PSU Table Tennis tournament, the BSNL woman teamreached upto the semi finals stage. With the freshrecruitment of sportspersons, the level of performanceof BSNL team is likely to improve further.

Tariffs:

The salient features of the details of Tariff orderissued by Tariff and Costing Section for the period1st April, 2003 to 31st March, 2004 on differenttelecom services are as under:

1. Basic Services:

� In response to TRAI's recommendations, alternativetariff for basic services was issued on April 11, 2003with date of implementation as May 5, 2003. In thisalternative tariff, BSNL has neither increased themonthly rental for any category of subscriber norreduced the duration of local call (fixed to fixed) despitethe increase recommended by TRAI, while the monthlyfree calls and unit call charges were kept at par withTRAI. Keeping in mind the different calling requirementof esteemed customers and also the competitive ratesoffered by other private service providers, five newpackages viz. BSNL ECONOMY, BSNL SPECIALand BSNL SUPER for urban and BSNL ECONOMYand BSNL SPECIAL for rural subscribers were alsooffered in addition to BSNL GENERAL (alternativetariff) and TRAI's STANDARD package. Customershave been given a choice to choose from the variousoptions at their will without paying any fee and nopackage has been forced on any subscriber. The existingcriteria of classification of Rural and Urban based onCensus report of India also continued.

52

(Hon’ble President of India Shri A. P. J. Abdul Kalam with CMD BSNLShri B. P. Sinha during 2004 FED Cup Asia/Ociana Zone match)

Later, in continuation of this circular, the chargesfor intra circle Basic to Basic STD calls, for "BSNLAlternate Packages" had been revised i.e. existing rateRs. 2.40 (pulse rate in seconds 30) to revised rate Rs.1.80 per minute (pulse rate in seconds 40) w.e.f.December 15, 2003.

The "BSNL Super Plan" was made applicable torural subscribers w.e.f . March 22, 2004.

� Due to concern expressed by public at large againstany increase in calls charges, the pulse rate for callsfor fixed to mobile were revised from 30 to 60 secondson May 13, 2003 to be made effective from May 17,2003 for subscribers of SDCAs with Point ofInterconnect (POI) of Cellular operators. Apart fromthis, more free calls viz. 50 and 75 per month to urbanand rural subscribers have been allowed against therecommendations of 30 and 50 respectively withretrospective date i.e. 01-05-2003.

� Besides implementation of IUC regime andrationalization of STD call charges, order to continuediscounts to high calling customers admissible underCorporate Account Holder Scheme was issued on02-06-2003.

� Clarification regarding peak & off-peak timings incase of calls to ISP was issued on 18-06-2003.

� On 24-07-2003, the call forwarding facility waspermitted from PSTN to Mobile/PSTN/WLL (M) andvice-versa within the BSNL network and within thelicensing area, where technically feasible. To othernetworks (other than BSNL), it is permitted only asper mutual agreement with concerned service provider.

� On 13-08-2003, pulses applicable in Peak and Off-peak periods for Calls to BSNL ISP in same SDCA,Calls to nearest BSNL ISP in case BSNL's ISP POPis not present in the same SDCA, Calls to ISP (Non-BSNL on 172-XXX) in same SDCA and Calls to ISP(Non-BSNL) not in same SDCA were intimated.

� On 09-09-2003, call charges for ISDN BRA to beimplemented from 01-08-2003 were fixed @ Rs. 1.20per call with no free calls for ISDN BRA connection.However, past cases of allowing free calls in respect

of ISDN were not re-opened.

� On 24-09-2003, tariffs for Plug and Sockets(additional facility) were revised. One-time chargeswith a warranty of 3 years for one Plug and two socketswere reduced from Rs. 300/- to Rs. 100/-. Besides this,it was decided to provide one additional Socket freeof cost, while charges for each additional Socket(beyond three Sockets) were fixed as Rs. 50/- for eachSocket.

� Promotional tariff for one month (effective from 22-10-2003) under ILD calls to UK, USA, Canada andall countries in Europe on account of "Diwali" wasmade available to subscribers on 20-10-2003. Underthis scheme, subscribers can make calls to U.K. @ Rs.7.20 per minute, while the calls to USA, Canada andall countries in Europe except U.K. can be made @Rs. 9.60 per minute. This scheme was applicable toISD calls originated from PCO, Cellular and WLL(M), where ISD call charges is prescribed as per PSTN.The promotional tariff was later extended up toMarch 31, 2004 vide order dated 15.01.2004.

� On the occasion of "Christmas and New Year",promotional tariff for ISD calls to Singapore, Hong-Kong, Indonesia, Malaysia and Thailand wereannounced. It was effective from 14-11-2003 to15-10-2004.

� The charges of Inland Bureau fax service have beenreduced w.e.f. 14-11-2003, which shall be charged atRs. 10/- per A-4 size page for machine to machinedelivery and Rs. 20/- per A-4 size page for Handdelivery (where fax is sent to another BSNL fax machineto be delivered through messenger).

� Clarification on determination of monthly rent onexchange capacity were issued on 18.11.2003. As perthe old tariff, for monthly rental urban subscribers, thetotal equipped capacity of all the exchanges in a SDCAhad to be considered. It has been clarified that BSNLexchange's capacity in the concerned SDCA will onlybe considered.

� The charges of Rs. 30/- per bill for issue of detailedbill to the subscriber for the bills to be issued on orafter 1-1-2004 has been waived off vide order dated23-12-2003.

53

� Promotional Tariff Scheme was announced for ILDcalls to Saudi Arabia during the period of Hajpilgrimage. This promotional tariff was applicable toISD calls originating from PCOs, Cellular and WLL(M), where ISD call charges are prescribed as per PSTN. The scheme was effective from06.01.2004 (midnight of 5th and 6th) to March 10,2004.

� Tariff for basic services-Charges for intra circle STDCalls w.e.f. 9.12.2003 wherein existing 30-second pulserate for more than 100 KMs. from basic to basic wasrevised to 40 seconds pulse rate. The rates were made applicable also for basic to WLL w.e.f.03.02.2004.

� All the CGMs have been empoweredw.e.f. 10.02.2004 to exempt Advance Rental Depositat the time of "bulk demand" (for 20 andmore connections) received from Commercial ImportantCustomers (CICs) subject to a few conditionsincluding that ARD applies only to Bfone and Tarangconnections.

� Consolidated instructions have been issued forcalculation of license fee on Adjusted Gross Revenue(AGR) for 2003-2004 by the circles vide order datedMarch 8, 2004.

2. Leased Circuits:

� On 15-09-2003, it was announced that the tariff forleased circuits of 1 Mbps shall be determined bymultiplying the tariff for leased circuits of 64 kbps bythe coefficient of 8.6.

� From 1st January 2004, option has been extendedto leased line customers for payment of leased circuitrental as quarterly in advance from the 1st year itself(in place of 2nd year onwards).

� Clarification on Agency charges payable toDeptt. of Posts on account of handling charges fortelegrams handled in Combined Post Offices was issued

on 17-12-2003, reiterating that rate of Rs. 6.95 is permessage and accordingly the total number of telegramsbooked only will be considered for calculatingthe handling charges in the Combined PostOffices.

� Amendments to revision in Charging Methodologyof Leased Lines regarding distance for the localleads/main circuits were issued on 22.01.2004. Theseamendments were effective immediately for all newcircuits and for existing circuits from the billing cycledue after 01.02.2004.

3. Tariff for WLL with Limited mobility- (Fixed& Mobile):

� Provisional tariff for WLL with limited mobility(WLL-M) was issued on 30-04-2003. The pulse forout going calls up to 50 KMs. were revised to 180, 90and 30 seconds for the calls made from WLL-M toWLL-M, WLL-M to Basic and from WLL-M to Cellrespectively under all plans. Clarification on the tarifffor the WLL with limited mobility (WLL-M) was alsoissued on 30-04-2003, where in call for WLL (FWL)to WLL (M) and vice versa in the same switch weredecided to be charged at the pulse rate of 180 secondstill further order. From 03-04-2003, shifting chargesfor WLL (FWL) were reduced from Rs. 600/- toRs.300/-.

� Provisional Tariff for WLL with LimitedMobility (WLL-M) was issued on 27-06-2003.The customers were given four options fortaking hand set. Under option I, customerswere permitted to bring their own handsets.Under option-II, customer may purchase hand set fromBSNL by paying Rs. 5000/- in 25 installments of Rs.200 each. Under option III, customer may obtainhandset from BSNL upon payment of prescribedinsurance charges, while under option-IV,customer may obtain hand set from BSNL afterdepositing security of Rs. 5000/-. There is no need ofany security deposit for the hand set under option I toIII.

54

In continuation of the above tariff circular, theprocedure & guidelines for carrying out of insuranceof handsets of WLL (M) provided under option-II (25installments of Rs. 200/- each) and option -III (uponpayment of insurance charges) were issued on 18-07-2003.

� On 21-07-2003, the conditions for Exemption ofSecurity Deposit of Rs. 2,400/- intimated vide tarifforder dated 18-02-2003 were modified. Instead of asecurity deposit of Rs. 5,000/-, the subscribers havingPSTN connection from BSNL are exempted to depositsecurity of Rs. 2,400/- towards WLL-M connection incase WLL-M connection is non-ISD and he has paidprescribed Security Deposit on existing wired linePSTN connection and a mandate form to chargeSecurity under PSTN towards WLL (M) connectionhas been given by him.

� On 11-09-2003, clarifications regarding ownership,maintenance & eligibility of refund during the currencyperiod, in case customer has taken WLL (M) handsetin 25 installments and by paying insurance premium,were issued.

� From 23-10-2003, circles were allowed to carry outthe insurance of WLL (FWT) sets as per terms andconditions specified for WLL (M) handsets & also tonegotiate with insurance companies at their level toobtain better insurance premium rate favourable toBSNL as in case of WLL (M). Free clip facility onWLL (M) phone was provided with effect from15-12-2003 wherever technically feasible to all WLL(M) subscribers.

� Alternative tariff option to all existing and newsubscribers of WLL(M) services comprising of monthlyrental, monthly free calls and unit call charges at parwith basic service tariff applicable to urban subscriberswere introduced on 29.01.2004.

� Clarifications were issued on 19.02.2004 in regardto WLL (M) handsets about recovery of service tax oninsurance premium and accounting procedure for theinsurance charges including S/T recovered.

2. Tariff for IMPCS / Cellular:

� Clarifications regarding Address verification for pre-

paid subscribers, exemption of payment of securitydeposit for new cellular connection for existing BSNLsubscribers and Friend and Family Talk issued on 01-04-2003.

� From 02-04-2003, revised pre-paid tariff for cellularMobile tariff for Calcutta Telecom District was madeavailable for the subscribers. Airtime charges of outgoing calls were reduced from Rs. 2.50 to Rs. 2.40,while for incoming calls it was made free. SMS chargeswere fixed to Rs. 1/- per message. Validity period ofRs. 500/- card is increased to 45 days. Grace period of15 days for all denominations card was provided, whileadditional grace period of 30, 45, 60 and 90 days wasgiven for cards of Rs. 250, 500, 1000 and Rs. 2000respectively. Talk value was reduced to Rs131, 338,776 and Rs. 1852 for cards of Rs. 250, 500, 1000 andRs. 2000 respectively.

� From 16-04-2003, free talk value on initializing theSIM was reduced from Rs. 100/ to Rs. 50/- with validityperiod of 7 days. The validity period of Rs. 500/- cardwas extended from 30 to 45 days. Tariff for outgoingSMS was fixed to Rs. 1/- per message. The airtimecharges for incoming calls were ordered to continueas free in all pre-paid schemes.

� On 17-04-2003, it was decided that no activationcharges will be levied for change from one plan toother type of plan i.e. from plan 225 to plan 325 orvice versa.

� Order regarding applicability of existing tariff inrespect of pre-paid and post-paid plans till furtherorders with incoming call free on all plans w.e.f. 01-05-2003 was issued on 30-04-2003. The STD & ISDcharges will also be collected as per existing rate, whilePSTN charges will be as per IUC Regulation order i.e.Rs. 0.50 per minute in Metro and Rs. 0.80 per minutein Circles.

In continuation of the above order, post-paid andpre-paid tariff plans, implemented from 17-05-2003,to all licensed service areas, were made available on15-05-2003. The STD call charges for Cell-to-Cellcalls (irrespective of distance) were fixed as Rs. 2.40per minute under Pre-paid and Post-paid Plan-225, andRs. 1.80 per minute for the distance up to 200 KMs

55

and Rs. 2.40 per minute for the distance slab of 200-500 KMs. under Plan-325 & Plan -525. The STD callcharges for calls made for the distance slab of morethan 500 KMs. were fixed as Rs. 3.60 per minute underpre & post paid plans. The charges for out going callsfrom Cell-to-Cell within circle were fixed as Rs. 2.20under pre-paid and post-paid Plan-225 and Rs. 1.40and Rs. 0.40 per minute under post-paid Plan 325 and525 respectively while the charges for the calls fromCell to fixed or WLL (M) were fixed as Rs. 2.40 underpre-paid and post-paid Plan-225 and Rs. 1.80 andRs. 1.20 per minute under Plan 325 and 525respectively. 15 Seconds & 30 Seconds pulse werefixed for out going calls made under all post-paid plansand pre-paid plan. 60 seconds pulse was fixed for allthe incoming calls under the post paid and pre paidplans.

� Voluntary deposit scheme with the payment ofinterest for cellular services as applicable for PSTNservices and concessional scheme for waiving activationcharges of Rs. 200/- in case of institutional subscribers,applying for at least 50 connections at a time, wereintroduced with effect from 10-05-2003.

� On 01-05-2003, orders regarding free talk value ofRs. 100/- on taking new pre-paid connection in Chennaion payment of activation charges of Rs. 200/- withvalidity period of 30 days were issued for 90 days fromthe date of implementation.

� Activation charges of Rs. 200/- (one time) underexisting post paid plan were waived out for 30 days inChennai Telephones w.e.f. 17-05-2003.

� The approval was granted for switching over ofcustomer of Tamilnadu Circle's Cellular C- DOT plan(i.e. SWARNA and Mayuri) to all India IMPCS systemwithout levy of fresh activation charges.

� The service tax was increased from 5% to 8% on allTelecom Service with effect from 14-05-2003. Keepingin view the customers interest, this increase of servicetax by 3% was absorbed by BSNL in case of pre-paidCellular scheme and met from the existing fixedprocessing charges. The net talk value available tocustomers of BSNL was not affected and it remainedunchanged.

� Tariff for Cellular under Post-Paid and Pre-Paidscheme was re-tabulated on 21-07-2003. The graceperiod of initial SIM card was increased to 15 days.Incoming call were allowed during grace period.Reference Tariff Package (RTP) with monthly rentalof Rs. 225 with 30 seconds pulse was also madeavailable for the subscribers in accordance with 24th

amendment to TTO, 99. The roaming charges forincoming and outgoing calls have been incorporatedas STD rates applicable for Cell-to-Cell calls underplan-225 for both pre and post paid plans. The chargesfor outgoing SMS under pre-paid scheme, while inroaming, were increased from 0 to 60 paise per message.

Clarification with reference to the above circularhas been issued on receipt of the queries from CirclesOffice on 10.03.2004.

� Promotional Tariff for pre-paid Cellular MobileTelephone Service in Gujarat and Haryana Circles wasissued on 23-07-2003. Free talk time value of Rs.200/- instead of Rs. 50/- with validity period of 30days instead of 7 days was allowed on SIM initializationduring the scheme period i.e. 24-07-2003 to31-07-2003.

� Promotional Tariff for post-paid Cellular MobileTelephone Service in A&N, Bihar, Maharashtra, MP,Chattisgarh, Rajasthan, HP, UP (E), Jharkhand, TN,West Bengal and Karnataka Circles was issued on 23-07-2003. Free talk time value of Rs. 100/- per monthfor the first 6 months was allowed to all new Post-Paidsubscribers on SIM initialization during the schemeperiod i.e. 24-07-2003 to 15-08-2003, subject to theavailability of sufficient unutilized capacity and SIMcards in the concerned circles. Further, on 31-07-2003,this scheme of promotional tariff was extended to A.P,Gujarat, Kerala, Orissa, Punjab, UP (West), Haryana& Chennai Telecom circles also from 01-08-2003 to15-08-2003 (both days inclusive).

� Vide order dated 8-8-2003, Companies registeredwith the Government under the Companies Act,Statutory bodies, Autonomous bodies like Universitiesetc recognized by the Central and State Governmentwere defined as CORPORATE CUSTOMERS. Inexisting cases, if any, already provided status of

56

"Corporate Customers" were not re-opened and theycontinued as "Corporate Customers".

� On 13-08-2003, tariff for duplicate bill in r/o CellularMobile service were intimated. For issue of a duplicatebill along with detailed particulars, applicable chargeswill be Rs. 100/- per detailed bill, while for issuing aduplicate bill without any details, merely for the purposeof payment of the bill due to non-receipt, delay due topostal delivery, etc. no charges are to be claimed fromthe subscriber.

� As a customer friendly gesture, the Employees ofCentral/ State Government and Central PSUs wereexempted to deposit Security for local/STD (not ISD)for post-paid cellular mobile connection from 19-08-2003. However, subscriber remains liable to highersecurity deposit in case of default or usage pattern asin case of PSTN phones.

� On 19-08-2003, instructions regarding to offeringthe Voice Mail Service (VMS) only with the consentof the mobile subscriber and to discontinue this service,if offered, with immediate effect in respect of thosesubscribers who had not provided their consent tilldate, were issued.

� Order regarding discount for VPN connections forTelugu Desam Party was issued on 21-08-2003 withmonthly charges of Rs. 800/- per month per connection.Free Talk Time of 200 and 100 minutes per month perconnection was allowed for calls made from Cell-to-Cell and Cell to fixed line including WLL (M)respectively for the calls out side the VPN, but withinthe AP state, while Intra VPN calls were kept free.STD and charges for all other services were kept asper plan-525.

To avoid the discrimination among the subscribers,the discount made available to Telugu Desam Partyfor VPN connections was extended on 17-09-2003 toall similarly placed customer groups of Andhra Pradesh,with more than 5000 connections each.

� Order regarding discount for VPN connections forAP Govt./ AP Police was issued also on 21-08-2003with monthly charges of Rs. 950/- per month perconnection. Free Talk Time of 300 minutes per month

per connection was allowed for calls made from Cell-to-Cell and fixed line including WLL (M) for the callsout side the VPN, but within the AP state, while IntraVPN calls were kept free. STD and charges for allother services were kept as per plan-525.

Further, special packages for VPN tariff for Cellularservice were made available on 06-10-2003 to all-important customers of AP Circle, who subscribe toat least 500 connections with Monthly charges ofRs. 800/- and 700/- respectively for each connectionunder package I and II. Free Talk Time of 100 minutesper month for each connection under package-I wasallowed for calls made (from Cell to Cell and Cell tofixed line) out side the VPN but within the circle, whileno free talk time was allowed Under package -II. Thecall charges out side the VPN, but within AP Statebeyond free range, STD /ISD calls charges and allother terms and conditions under both packages werekept as per Plan-525.

� As part of the initiative to provide better value tothe students of colleges/schools, promotional Tarifffor post-paid Cellular Mobile Telephone Service wereissued on 25-08-2003 for a period of 30 days from 02-09-2003 under STUDENT POWER plan subject tothe availability of sufficient unutilized capacity andSIM card. The validity of the plan will be one year.On completion of one-year validity period, subscriberwill be shifted to Plan-225 unless specific request foropting a particular scheme is received in time. Monthlyrental is Rs. 99/- per month, while call charges andtariff for other value added services are as per plan-225. The Pulse rate is of 15 seconds and SMS chargeshas been fixed as Rs. 0.60 per message.

Clarification regarding eligibility condition,consent/mandate by parents in case of BSNL employees,filing of identification by Student on �Student Power�Package under Post Paid Cellular Mobile services wasissued on 11-09-2003.

In view of the encouraging response, the validityof promotional tariff made available under " STUDENTPOWER" was extended up to 31st October 2003 on1st October 2003.

After receiving the encouraging response from the

57

field units, the promotional tariff "STUDENT POWER"was relaunched on 05-02-2004 and extended up toMarch 31, 2004, in Punjab, Gujarat, A.P. Karnatakatelecom circles and Chennai and Kolkata TelecomDistricts.

The promotional tariff "STUDENT POWER" wasrelaunched on 16-02-2004 and extended up to 31-03-2004 for U.P. (W) and Uttaranchal Telecom Circlesalso.

� Promotional Tariff from 26-08-2003 to 03-09-2003for Post-Paid Cellular service for Chennai Telephoneswas issued on 25-08-2003. Activation charges of Rs.200/- were waived out for a period of one month andan ITC card worth Rs. 540/- was offered for everycustomer opting for Plan-525.

� Concessional Tariff on the occasion of "GANPATHIFESTIVAL" was issued on 03-09-2003 for CellularSubscribers of Maharashtra Telecom Circle. SMS andActivation charges of Rs. 200/- per connection werewaived out during the period 31-08-2003 to 03-09-2003.

� Clarification regarding use of Plan-325 & 525 insame VPN group was issued on 07-10-2003. The VPNgeneral group may contain mix of Plan (i.e. 325 &525) and accordingly VPN and other charges will beapplicable as per respective plan. Per connectionMonthly charges (including VPN charges) for eachconnection under plan - 325 will be Rs. 425, 575, 675and Rs. 775 under plan - 525 for the group havingconnections up to 50, 51-250 and 251-999 respectively.It was also clarified that the Corporate VPN provided@ Rs. 150/- per number prior to 01-05-2003 would beautomatically switched over to respective plansintimated on 15-05-2003. In addition to this it was alsoclarified that the VPN group is not open to plan 225subscribers.

� Cellular Post paid tariff for Maharashtra TelecomCircle was reviewed on 8-10-2003. Free call worth Rs.75 and Rs. 100 per month was allowed under plan 325and plan 525 respectively. In addition to this, a newplan 140 was introduced with pulse rate of 60 seconds

and no free calls. Under this plan, local call chargesfor the calls made from Cell to Cell phone, PSTN andWLL-M were kept as Rs. 1.50 per minute. STD chargesfor the call made from Cell to Cell were kept as Rs.1.80 per minute irrespective of distance, while STDcharges for the calls made from Cell to PSTN andWLL-M were fixed as Rs. 1.50, 1.80, 2.40 and 3.60per minute for the distance slabs up to 50, 50-100, 100-200 and more than 200 KMs. respectively.

In continuation of this tariff circular, it was intimatedon 11/16.12.2003 that STD rates for Cell to WLL /Cell to fixed line network for distance slab 50 to 100Kms. will be charged at rates applicable to 100 to 200Kms. (i.e. Rs.2.40 instead of Rs.1.80 per minutes).

� In order to meet the demand of largeorganizations/Corporate offices, a new VPN tariff planwas issued on 9.12.2003, in addition to the existingplans. This plan consists of monthly charges Rs. 500/- per connection, intra VPN Calls free, service tax extra,all other charges, and calls outside the VPN as per plan525, and minimum size of VPN group is 2000 Nos.

� For IMPCS launched in NE-I and NE-II Circle inthe 1st week of January 2004, it was announced on26.12.2003, that the existing All India Cellular tariff(comprising of post paid and prepaid plans along withRTP) communicated on 21.07.2003 read withsubsequent amendments/clarifications were extendedto NE Circle from the date of launch of service.

� VPN Tariff was announced on 05.01.2004 for Pimpri-Chinchwad Municipal Corporation giving concessionsin addition to the existing VPN Tariff (activationcharges of Rs.200 per connection waived off forsubscribers applying for at least 50 connections at atime, detailed bill charged @Rs.20 per bill, discountto be considered as per CAHS, continued serial numbersand billing procedure as per requirement of PCMCprovided).

� Existing All India Cellular Tariff (comprising ofpost paid and prepaid plans along with RTP) wasextended on 09.01.2004 to Assam Telecom Circle fromthe date of launch of service.

58

� Tariff for international in-roamers and the BSNLoutbound subscribers in Cellular Mobile Telephoneservice was prescribed on 16.01.2004.

� Changes/New schemes introduced in respect of tarifffor international and national SMS and loyalty schemefor the postpaid subscribers with effect from 01.02.2004. Recharge coupons of smaller denomination for prepaidsubscribers were introduced in all circles with effectfrom 16.02.2004. Charges for international SMS havebeen amended for outgoing international SMS as "postpaid subscribers - Rs.3 per message maximum 160characters and prepaid subscribers Rs.5 per messagemaximum 160 characters�. Security Deposits for outbound international roaming subscribers to be Rs.7500,for all postpaid subscribers inclusive of security depositalready made. National SMS revised as Rs.0.40 permessage instead of Rs.0.60 per message. Loyaltyscheme for postpaid tariff plan to consist of free callsworth Rs.75 and Rs.150 per month under Plan 325 andPlan 525 respectively subject to the condition thatcustomer is a BSNL CellOne subscriber of six monthsor more as on 01.02.2004. Those who have not coveredsix months on 01.02.2004 will get free talk value fromthe 1st of the month in which six months are completed.Additional recharge coupons of Rs.70 and Rs.150 withtalk value worth Rs.38 and Rs.85 were introduced inall circles with effect from 16.02.2004 for prepaid tariffplan.

Clarification on the points/issues raised by circlesafter issue of the above tariff circular was issued on05.03.2004. Further, clarification about validity andgrace period was issued on 22.03.2004.

� The charges for SMS service under Plan-525 hasbeen revised on 03.02.2004 from Rs.0.60 SMS toRs.0.40 per SMS maximum 160 characters beyond thefree limit of SMS and other clarifications issued aboutgroup messaging and charges for delivery reports ofSMS.

� Instructions regarding carry forward of unusedbalance to prepaid subscriber during the grace periodapplicable at the time of recharge coupon issued byTRAI vide 30th Amendment to TTO' 99 has beencirculated to All Heads of Circles for implementation

on dated 19-2-2004.

Development of Telecommunication facilitiesin selected areas

Special Component Plans

Annual Plan of 2003-04 (BE) and Revised Plan2002-03 (RE), inter-alia, pay special emphasis onaccelerated growth and early implementation oftelecommunication facilities under Special ComponentPlans in (i) North Eastern Region (ii) Tribal sub-planareas and (iii) National Capital Region Plan. Thedetails are given below:

North East (NE) Region Plan

NE Region being a sensitive border area was treatedas a special focus area in the 9th Plan. The erstwhileDTO/DTS provided a special attention for developmentof telecom facilities in these regions and BSNL iscontinuing to provide special attention. North Easternregion comprises Telecom Circles of Assam coveringthe State of Assam and North East Telecom Circle I& II covering the States of Meghalaya, Mizoram,Tripura, Arunachal Pradesh, Nagaland and Manipur.As on March 31, 2003, there were 1033 telephoneexchanges in the North East Region and 8.19 lakhconnections.

59

Physical Performance-State-wise position � Thestatus of telecom facilities as on March 31, 2004, ineach of the states of North East Region namely,Assam

(AS), Arunachal Pradesh (AP), Manipur (MNP),Meghalaya (MEG), Mizoram (MZR), Nagaland (NLD),and Tripura (TRP) is shown in the following table:

60

Status of number of telephones as on March 31, 2004 and the tele-density state-wise for North Eastern Statesare given in the following table:

Telephone per 100 Population-Urban/Rural (Tele-Density) (as on 31.03.2004)

Status of Telecom facilities in North Eastern Region (State/Circle�Wise) as on 31.03.2004

* Fixed Lines Only

** In addition to above figures of SDHQs, there is one SDHQ in NE-I Circle & Three DHQs inNE-II circle, which don�t have exchange/STD, as there is no demand.

Sl. CIRCLES Estimated Population Telephones Tele-density as No. March, 2004 as on 31.03.2004 on 31.3.2004

(Fixed+WLL+CMP)1. ASSAM 27497655 539272 2.212. MEGHALAYA 2380454 72640 3.003. MIZORAM 919800 57051 1.714. TRIPURA 3294102 86833 9.305. ARUNACHAL PRADESH 1126312 59264 5.186. MANIPUR 2465682 51161 2.047. NAGALAND 2052781 54227 2.608. NE TEL.CIRCLE 12239131 381176 3.079. NE REGION 39736786 920448 2.5010. BSNL 1044797143 41648546 3.99

Sl. Item NE-I Circle NE-II Circle Total Total NENo. MEG MZR TRP AP MNP NLD NE AS Region

1 Tele-Exchanges 100 76 93 105 50 60 484 591 1075

2 *Capacity 82752 71900 113634 83000 59912 60020 471218 656725 1127943

3 Total DELs 72640 57051 86833 59264 51161 54227 381176 539272 920448

4 Waiting List 622 437 4916 1590 3421 376 11362 15979 27341

5 VPTs 2696 611 822 804 1585 1018 7536 19379 26915

6 Stations with 76 64 77 105 50 60 432 521 953NSD/ISD

7 DHQ with 7 8 4 15 9 11 54 23 77NSD/ISD

8 SDHQs with 15 16 15 36 31 22 135 48 183NSD/ISD **

9 Station on 76 64 77 105 50 60 432 521 953reliable media

61

Targets and Achievements 2003-04 Assam Telecom Circle

NORTH EASTERN TELECOM CIRCLE (ARUNACHAL PRADESH, MEGHALAYA, MANIPUR,MIZORAM, NAGALAND & TRIPURA)

Tribal Sub-Plan (TSP) 2002-2003

The Tribal Sub-Plan (TSP) is a part of the 10th FiveYear Plan for providing telecom facilities in the tribalareas. For a balanced and faster development of telecomfacilities in tribal areas, these areas are treated as SpecialFocus Areas. The main objectives of the Tribal Sub-Plan are (i) to provide the telephone facility on demandin tribal areas (ii) to provide NSD facility to allexchanges in Tribal areas and (iii) to provide publictelephones in all tribal villages. The physical Targetsand Achievements during 2003-04 are given inAnnexure �1.

National Capital Region (NCR)

In order to decongest the National Capital (Delhi)

and to reduce the population pressure on it, NationalCapital Region consists of 12 priority towns and 5counter magnet towns spreading to 5 States surroundingthe National Capital is being given special attentionfor the development of infrastructure facilities includingthe telecom facilities in these towns. During 2003-04,BSNL has provided 24,278 Direct Exchange Linesagainst a target of 98,081 DELs, bringing a total of10.75 lakh DELs in the Region. During the 10th Planperiod, efforts are being made to improve the telecomfacilities of NCR and to introduce various value addedservices to make it at par with Delhi, as demanded bythe NCR Planning Board. It is also aimed to make thetelephone available on demand at the earliest duringthe 10th plan period in the entire NCRregion.

Development 2003-2004

Parameter Target Achievement

Net Switching Capacity

(Lines) (Fixed+WLL+CMTS) 26000 103955

DELs (Nos.) (Fixed+WLL+CMTS) 83000 49771

VPTs (Nos) 4300 1354

UHF/Microwave (RKms) 75 174.8

OFC (RKms) 750 973.46

Development Parameter NE-I NE-II

Target Achievement Target Achievement2003-04 2003-04 2003-04 2003-04

Net Switching Capacity (Lines)

(Lines) (Fixed+WLL+CMTS) 16000 29260 11000 28260

DELs (Nos.) (Fixed+WLL+CMTS) 19500 26096 14500 26518

VPTs (Nos) 845 847 445 907

UHF/Microwave (RKms) 85 147.61 100 82.75

OFC (RKms) 550 277.45 500 457.95

62

Annexure �I

TRIBAL SUB-PLAN

Targets and Achievements 2003-2004

Note: * All the decommissioned Microwave & Satellite routes are

replaced by OFC media.

Sl. No. Item 2003-04

Target Achievement

1. Telephone Exchanges (Nos.) Nil 66

2. Switching Capacity (Lines) 300000 294680

3. DELs (Nos.) 270000 234114

4. VPTs (Nos) Nil 3082

5. *Microwave (RKms) 200 -2451.3

6. OFC (RKms) 600 2210.03

7. *Satellite Stations (Nos.) 20 -18

63

Annexure � II

Status of Telephone Exchanges and DELs as on 31.03.2004

Sl. CIRCLE/STATES Direct Exchange TelephoneNo. Lines as on Exchanges as on

31.03.2004 31.03.2004

1. A. & N. 44293 52

2. A. P. 3782904 3200

3. ASSAM 539272 591

4. BIHAR 1109622 1117

5. CHATTISGARH 357239 668

6. GUJARAT 3257503 3290

7. HARYANA 1333032 1026

8. H.P 549418 936

9. J. & K. 328750 358

10. JHARKAHND 574696 427

11. KARNATAKA 3082256 2706

12. KERALA 3631916 1192

13. M.P. 1476693 2782

14. MAHARASHTRA 4556423 4938

15. N.E. -I 217159 269

16. N.E.-II 164652 215

17. ORISSA 944252 1122

18. PUNJAB 2317174 1531

19. RAJASTHAN 2032607 2338

20. TAMILNADU 3267233 2133

21. UTTARANCHAL 456245 444

22. U.P. (E) 2094566 2288

23. U.P. (W) 1574896 954

24. W.B. 1384452 1344

25. KOLKATA 1412960 491

26. CHENNAI 1158333 206

TOTAL BSNL 41648546 36618

64

Annexure � III

RURAL TELEPHONES (DELs) - BSNL

* DELs Including WLL & CMTS

** Rural DELs including WLL

Sl. NAME OF *Direct Exchange *Rural Direct Proportion ofNo. CIRCLE Lines as on Exchange lines rural DELs

31.03.2004 as on (%age) as on31.03.2004 31.03.2004

1. A. & N. 44293 21021 47.46

2. A. P. 3782904 1335347 35.30

3. ASSAM 539272 135316 25.09

4. BIHAR 1109622 396792 35.76

5. CHATTISGARH 357239 81307 22.76

6. GUJARAT 3257503 846322 25.98

7. HARYANA 1333032 382110 28.66

8. H.P. 549418 316153 57.54

9. J. & K. 328750 50127 15.25

10. JHARKAHND 574696 99941 17.39

11. KARNATAKA 3082256 867331 28.14

12. KERALA 3631916 2091952 57.60

13. M.P. 1476693 319694 21.65

14. MAHARASHTRA 4556423 1356851 29.78

15. N.E. -I 217159 56284 25.92

16. N.E.-II 164652 48556 29.49

17. ORISSA 944252 308642 32.69

18. PUNJAB 2317174 802530 34.63

19. RAJASTHAN 2032607 615339 30.27

20. TAMILNADU 3267233 799681 24.48

21. UTTARANCHAL 456245 97325 21.33

22. U.P. (E) 2094566 479326 22.88

23. U.P. (W) 1574896 186512 11.84

24. W.B. 1384452 577658 41.72

25. CHENNAI 1412960 0 0.00

26. KOLKATA 1158333 0 0.00

TOTAL BSNL 41648546 12272117 29.47

65

Annexure � IV

NUMBER OF VILLAGES WITH DIRECT ACCESS TO TELECOM FACILITIES - BSNL(As on 31.3.2003 & 31.03.2004)

Sl. TELECOM Villages Total Villages % ofNo. CIRCLE/METRO Covered by Villages Covered by Villages

DISTRICTS VPTs VPTs Covered31.03.2004 31.3.2003

1. A. & N. 198 201 198 99

2. A. P. 23419 29460 23419 79

3. ASSAM 19379 24685 18025 79

4. BIHAR 38475 41077 38475 94

5. CHHATISGARH 14665 19720 14665 74

6. JHARKHAND 26904 31703 26270 85

7. GUJARAT 11214 18125 11214 62

8. HARYANA 6811 6850 6811 99

9. H.P. 16587 16925 16585 98

10. J. & K. 4786 6764 4249 71

11. KARNATAKA 27066 27066 27066 100

12. KERALA 1468 1468 1468 100

13. M.P. 37601 51806 37597 73

14. MAHARASHTRA 31541 42467 31541 74

15. N.E.-I 4189 7125 3342 59

16. N.E.-II 3251 7020 2344 46

17. ORISSA 40753 46989 40435 87

18. PUNJAB 12687 12687 12687 100

19. RAJASTHAN 23858 39483 23858 60

20. TAMILNADU 17899 17899 17899 100

21. U.P. (E) 76000 79792 75965 95

22. U.P.(W) 21268 23604 21268 90

23. UTTARANCHAL 11729 15610 11630 75

24. W.B. 37306 38337 37306 97

25. CALCUTTA 437 437 437 100

26. DELHI 191 191 191 100

BSNL 509682 607491 504945 84

66

Annexure � V

Status of Cellular Mobile Phones - BSNL

** Included in NE - I

Sl. States/Circle No. of Cellular Target AchievementNo. Subscribers 2003-04 during

As on As on 2003-0431.3.2003 31.3.2004

1. A. & N. 2083 6087 2000 4004

2. A. P. 217106 567877 350000 350771

3. ASSAM 0 26211 38000 26211

4. BIHAR 44572 155175 60000 110603

5. CHHATISGARH 15493 32072 30000 16579

6. GUJARAT 275691 482113 300000 206422

7. HARYANA 77347 192464 80000 115117

8. H.P. 22274 72625 20000 50351

9. J. & K. 0 40100 40000 40100

10. JHARKHAND 31753 102478 40000 70725

11. KARNATAKA 200205 330196 220000 129991

12. KERALA 203931 373752 220000 169821

13. M.P. 64542 120839 70000 56297

14. MAHARASHTRA 275533 610471 300000 334938

15. N.E.-I 0 12160 50000 12160

16. N.E.-II 0 8104 ** 8104

17. ORISSA 70332 163544 90000 93212

18. PUNJAB 161706 294317 220000 132611

19. RAJASTHAN 85117 221387 120000 136270

20. TAMILNADU 160089 400137 180000 240048

21. UTTARANCHAL 26425 85432 40000 59007

22. U.P. (E) 127905 345221 150000 217316

23. U.P.(W) 102128 295266 130000 193138

24. W.B. 72897 168135 80000 95238

25. CALCUTTA 19159 26401 70000 7242

26. CHENNAI 0 121553 100000 121553

BSNL 2256288 5254117 3000000 2997829

67

Annexure � VI

TELEPHONE PER 100 POPULATION by BSNL - URBAN/RURAL(TELE-DENSITY) (AS ON 31.3.2003 & 31.03.2004)

Note: Expected Population as on March 2004 as per census

Sl. CIRCLES/ TELEPHONE DENSITY/100 *POPULATIONNo. METRO Overall Urban Rural

DISTRICTS 31.03.03 31.03.04 31.03.03 31.03.04 31.03.03 31.03.04

1. A. & N. 10.33 11.86 15.70 19.07 7.72 8.36

2. A. P. 4.44 4.76 10.97 11.39 2.02 2.31

3. ASSAM 1.78 1.93 10.56 11.37 0.50 0.56

4. BIHAR 1.13 1.28 6.59 7.83 0.49 0.51

5. CHHATISGARH 1.47 1.64 5.73 6.30 0.40 0.47

6. GUJARAT 6.18 6.10 12.42 12.10 2.48 2.53

7. HARYANA 5.37 6.03 12.80 14.84 2.33 2.43

8. H.P. 7.90 8.62 30.77 37.40 5.42 5.50

9. J. & K. 2.54 3.11 8.61 10.61 0.53 0.63

10. JHARKHAND 1.70 2.04 6.24 7.56 0.41 0.46

11. KARNATAKA 5.43 5.58 11.40 11.79 2.35 2.38

12. KERALA 9.79 10.86 15.60 17.71 7.75 8.45

13. M.P. 2.12 2.33 6.38 6.85 0.57 0.69

14. MAHARASHTRA 5.01 5.34 11.45 12.18 2.15 2.29

15. N.E.-I 2.90 3.24 9.58 10.68 0.96 1.08

16. N.E.-II 2.45 2.87 8.58 9.66 0.82 1.07

17. ORISSA 2.12 2.45 9.27 11.03 0.87 0.94

18. PUNJAB 8.50 8.77 15.54 15.96 4.55 4.74

19. RAJASTHAN 3.12 3.43 9.18 10.24 1.27 1.36

20. TAMILNADU 5.21 5.50 10.47 10.97 2.01 2.17

21. UTTARANCHAL 4.27 5.13 12.91 15.78 1.29 1.47

22. U.P. (E) 1.63 1.75 7.00 8.42 0.60 0.48

23. U.P. (W) 2.56 2.91 7.09 8.17 0.48 0.50

24. W.B. 1.75 1.96 7.13 8.25 0.89 0.95

25. CALCUTTA 10.06 10.20 10.06 10.20 0 0.00

26. CHENNAI 16.25 17.20 16.25 17.20 0 0.00

BSNL 3.71 3.99 10.14 10.95 1.49 1.58

69

IntroductionMahanagar Telephone Nigam Limited (MTNL)

was formed on April 1, 1986 and was incorporated asa Limited Company to manage and controltelecommunication services (excluding telegraphservices) in the two metropolitan cities of Delhi andMumbai. The jurisdiction of the company comprisesthe city of Delhi and the areas falling under the MumbaiMunicipal Corporation and Thane MunicipalCorporation. For Cellular Services, the company hasthe licence to provide the service in Delhi includingthe peripheral towns of Gurgaon, Faridabad, Ghaziabadand Noida and in Mumbai including Kalyan. ForInternet service, the company through MillenniumTelecom Limited (MTL), a wholly owned subsidiaryof MTNL has an all India licence toprovide Internet services.

The authorised capital of theCompany is Rs. 800 crore. The PaidUp Share Capital is Rs. 630 croredivided into 63 crore shares of Rs.10 each. At present, 56.25% equityshares are held by President of Indiaand his nominees and remaining43.75% shares are held by FIIs,Financial Institutions, Banks, MutualFunds and others includingindividual investors.

VisionThe vision of the company is to provide world-class

telecom services at affordable rates and ultimately tobecome total solution provider in telecom sector.

Joint Ventures MTNL is harnessing attractive opportunities for

profitable growth in the existing areas and is enteringinto Joint Ventures in India and abroad.

MTNL has been successful, along with TCIL andVSNL and a local Nepalese partner (NVPL), in gettinga licence for providing WLL based basic telephonyservices throughout the Kingdom of Nepal. This JointVenture Company (MTNL-26.66%, VSNL-26.66%

and NVPL-20%) has been named as United TelecomLimited (UTL) and has been registered in Nepal. TheCompany is operational since October 10, 2001 andfirst phase of services has already rolled in the year2003.

MTNL has obtained licence to operate as secondoperator for providing basic, international long distanceand GSM services in Mauritius. MTNL has set up its100% subsidiary, Mahanagar Telephone MauritiusLimited, for rollout of the telecom network in Mauritius.

Physical PerformanceTele Services

There has been an all round development and growthin the number of Direct Exchange Lines (DELs) along

wi th improved opera t ionalefficiency. In MTNL, a variety ofphone plus services have been madeavailable to the customers connectedto modern state of art technologydigital exchanges e.g. computerizedmorning alarm, voice mail,automat ic changed numberannouncement, computerized faultbooking/payment system etc.Sustained efforts are being made tomaintain a high level of various

operational parameters such as STD and Local Callcompletion rate. MTNL has taken several steps toimprove its interface with the customers. TelephoneAdalats and Open House Sessions are being held forboth-way effective communications with the customers. Quick customer service centres are running at alldivisional offices for catering to the day-to-day needsof customers for accessories, phone plus services, STDbarring/restoration, local shift of telephone, ISDN,Internet connections and IN services.

During the year 2002�03, a total of 815.06K linesgross switching capacity and 238.422K DELs (includingGSM subscribers) were added by MTNL. During theyear, 31,283 local PCOs and 11,920 STD PCOs wereprovided.

III.2 Mahanagar Telephone NigamLimited (MTNL)

70

During the year 2003-04, additional 780.57K linesgross switching capacity and 841.70K DELs (includingGSM subscribers) were added. However, overall growthwas negative due to surrenders exceeding the newconnections. The local PCOs and STD PCOs addedduring the year stood at 25,057 and 10,164 respectively.Details of achievements are given in Annexure-I andII of this chapter.

Clearance of Waiting List

With sustained efforts and timely implementationof various projects, the waiting list was �NIL� in Delhiand Mumbai as on 31st March 2004. MTNL isproviding telephone on demand except in technicallynon-feasible areas.

Cellular Services

At present, a network of 225K lines each in Delhiand Mumbai is working. Further, the purchase orderfor procurement of 400K lines of GSM technologyequipment each for Delhi and Mumbai has been placedon M/s Motorola. The new ordered equipment is likelyto be installed and commissioned in 2004-05.

Wireless in Local Loop

At present, a network of 150K lines each in Delhiand Mumbai is working. Further, the purchase orderfor procurement of 400K lines of CDMA 2000 1Xtechnology equipment each for Delhi and Mumbai hasbeen placed on M/s HFCL. The new ordered equipmentis likely to be installed and commissioned in 2004-05.

Managed Leased Line Network (MLLN)

MLLN system was commissioned in 2003 in Delhiand Mumbai. The system manages the leased lines ofsubscribers end to end, ranging from 64 Kbps to 2Mbps. MTNL envisages that MLLN will cover bothpoint to point and point to multi point leased lines.During the year 2003-04, MTNL has provided 2605

leased circuits in Delhi and Mumbai.

Internet Service

ISP set up is being expanded by 5000 each in Delhiand Mumbai with enhanced features of Billing andEnterprise Management. Total of 1,65,526 Internetconnections have been provided during the year

2003-04.

Asymmetrical Digital Subscriber Line (ADSL)equipment

1000 lines each in Delhi and Mumbai have beeninstalled. During the year 2003-04, 170 connectionshave been provided for high-speed Internet access.

New Projects1. Managed Leased Line Network (MLLN): MTNLhas planned to expand its Managed Leased LineNetwork. The capacity of existing network will beenhanced by 11,000 circuits. The new MLLN systemwill include the billing for MLLN and non-MLLNcircuits, accounting, provisioning, webself care etc.By commissioning the new system, MTNL will beable to provide SLA (service label agreement),centralized billing, monitoring of billing and SLAparameters through Internet etc.2. Internet Bandwidth and Bandwidth ManagementTools: MTNL is planning to procure 152 Mbps InternetBandwidth. It will help to provide better Internet relatedservices to customers. MTNL is also planning to installBandwidth Management Tools for managing thebandwidth and various policies/applications of Internet. 3. Inter Operator Billing System: The system isbeing implemented in MTNL on outsourced basis. Thesystem will be able to do inter-operator billing withother Telecom Service Providers (fixed line and wireless).The system is based on automatic collection of datafrom all point of interconnection with other TelecomService Providers. There is a provision of dispute

Fault RateDuring 2003-04, the fault rate (No. of faults/100 telephones/month) vis-à-vis previous years is as shown below:

Units 1999-2000 2000-01 2001-02 2002-03 2003-04

Mumbai 13.3 11.03 11.84 9.79 10.44

Delhi 30.38 20.00 21.35 18.71 15.10

71

settlement with various operators based on CDRreconciliation.

4. Convergent Billing and CRM Project: ConvergentBilling and CRM system has been planned. The systemwill issue single CDR based convergent bill for allpresent and future services provided by MTNL. Thesystem will have flexibility to introduce any numberof tariff plans in a short time. The system will achievethe goal of single point customer contact and the entirecustomer needs will be handled at singlecounter/location. The system will be Web enabled ande-Commerce/e-Governance activities will be inbuilt.

Meeting Competition

To meet the challenge of competition, the Companyhas taken various initiatives, which include restructuringat operational level as well as broadbasing the serviceportfolio being offered by the company. As the companyhas only basic and cellular service licence, the emphasishas been on addition of value added services. Thecompany has commercially launched broadbandservices and the equipment for Digital certification isbeing setup, which is likely to be operational in theyear 2004. A number of customer friendly initiatives,which broadly include web-based solutions, SMS andcall centre based, have been incorporated to enhancecustomer care.

The company has created new divisions likeMarketing, Sales, Corporate Sale/CAM/CustomerSupport, for marketing its products and preparedaggressive marketing plan to meet out competitorseffectively.

Financial PerformanceDuring the year 2002-03, MTNL has achieved a

financial turnover of Rs.5806.530 crore, with a decreaseof 5.49% over the previous year�s turnover ofRs. 6143.724 crore. MTNL has registered a profit ofRs. 1259.756 crore before tax and prior periodadjustments as against the profit of Rs. 1802.316 crorein the previous financial year. This has reduced by30.10%.

MTNL�s net worth increased to Rs. 9496.973 crore,an increase of 6.23% over the previous year�s net worthof Rs. 8939.641 crore. This increase is on account ofasset build up. During the year under review, the totalrevenue expenditure excluding prior period adjustmentswas Rs. 4770.909 crore registering an increase of 3.95%over the previous year�s expenditure of Rs. 4589.754 crore.

DividendMTNL paid 45% dividend on the paid-up share

capital of Rs. 630 crore for the financial year 2002-03.

Capital Expenditure on TechnologyDuring the year 2002-03, MTNL has spent an

amount of Rs. 1053.91 crore as against Rs. 1033.57crore in the previous year on account of capitalexpenditure. This was achieved entirely through internalresource generation.

Trading of MTNL SharesShares of MTNL, which are listed with principal

stock exchanges in the country, are being tradedregularly in the stock exchanges of Mumbai, Kolkata,Delhi and Chennai as well as the National StockExchange of India. Consequent upon the conversionof GDRs into ADRs, the company has been listed withNew York Stock Exchange (NYSE). MTNL is the 9th

Indian Company and 2nd Indian PSE to be listed inthe NYSE.

Redemption of BondsDuring 2002-03, the company redeemed on maturity

XIV, series of Bonds aggregating to Rs. 26190 millionraised in earlier years for Department ofTelecommunications. This amount has been adjustedin the accounts with BSNL.

ICWAI Award for cost reduction by MTNL-CMD,MTNL recieved the award

72

Manpower

The total employees of MTNL were 58072 as on31st March 2003 belonging to different categories. Of

the total employees, the number of employees belongingto Scheduled Caste is 10379, which constitutes 17.87per cent of total employees. The total number ofemployees belonging to Scheduled Tribe is 1836, whichis 3.16 percent of total employees. Position of staff ason 31.3.03 is given below:

Group Total Staff SC ST

Nos. % Nos. %

A 1128 198 17.55 29 2.57

B 6429 893 13.89 156 2.43

C 33901 5463 16.11 576 1.70

D 16526 3825 23.15 1075 6.50

DRM 88 -

TOTAL 58072 10379 17.87 1836 3.16

Annexure � IDEVELOPMENT TARGETS/ACHIEVEMENTS � MTNL, DELHI

Target Achievements Target Achievements (MOU) 2002-03 (MOU) 2003-042002-03 2003-04

A. SWITCHINGi. Gross Capacity (In 000 lines) * 473.698 * 476.794ii. Scrapping (In 000 lines) 150 171.3 145 164.72iii. Withdrawn for Re-deployment (in 000 lines) - 0 - 0iv. Net Capacity (In 000�lines) 100 291.798 200 312.074v. DELs (In 000�lines) 100 128.269$ 150

Gross 378.355$Net -154.532

vi. TAX/Tandem (In 000� lines) 25 65 20 40B. SUBSCRIBER EXTERNAL PLANTi. Cable Laying (In LCKM) * 8.66979 * 8.80781ii. Ducting (In Kms.) * 27.13 * 10.57C. TRANSMISSION (NAME OF SYSTEM)a) SDH * 89 * 83i. STM-16 0 37ii. STM-4 49 35ii. STM-1 40 11D. OPTICAL FIBRE CABLE @ * 1096.98 * 583.593E. ISDN * 1598 * 1175F. WAITING LIST 0 0G. NEW REGISTRATION 177637 174909H. PCOs 700 700

a) Local 11675 9117b) STD 7555 7453

@ Fibre Km $ Including Fixed lines, WLL(M) and GSM * Targets are not specified in MOU Document

Celebration Hindi Pakhwara by MTNL Employees

73

Annexure � II

DEVELOPMENT TARGETS/ACHIEVEMENTS � MTNL, MUMBAITarget Achievements Target Achievements(MOU) 2002-03 (MOU) 2003-04

2002-03 2003-04

A. SWITCHING

i. Gross Capacity (In 000 lines) * 341.362 * 303.778

ii. Scrapping (In 000 lines) 300 300.37 125 290.952

iii. Withdrawn for Re-deployment (in 000 lines) - 31.748 *

iv. Net Capacity (In 000 lines) 50 10.244 180 12.826

v. DELs (In 000 lines) 10 110.153$ 150

Gross 463.349$

Net 7.021

vi. TAX/Tandem (In 000 lines) 25 25 20 41.2

B. SUBSCRIBER EXTERNAL PLANT

i. Cable Laying (In LCKM) * 10.4966 * 8.35889

ii. Ducting (In Kms.) * 40.76 * 19.3

C. TRANSMISSION (NAME OF SYSTEM)

a) PDH * *

i. 8 Mbps 38 -3

ii. 34 Mbps of system 92 18

iii. 140 Mbps of system 0 5

iv. 565 Mbps of system 0 0

b) SDH * * 97

i. STM-16 16 70

ii. STM-4 16 17

ii. STM-1 51 10

D. OPTICAL FIBRE CABLE@ * 278.369 * 424.366

E. ISDN * 1122 * 830

F. WAITING LIST 0 0

G. NEW REGISTRATION 213478 344342

H. PCOs 700 700

a) Local 19608 15940

b) STD 4365 2711

@ Fibre Km$ Including Fixed Lines, WLL (M) and GSM* Targets are not specified in MOU Document

* * *

75

IntroductionIndian Telephone Industries Limited was set up in

1948 and is the first Public Sector Unit in the country.Over 70% of the telecom equipment in the nationaltelecom network has been manufactured and suppliedby ITI. The Company has seven state-of-the-artmanufacturing plants and 70 sales and services centerslocated across the length and breadth of the country.Three R&D centers with competent and qualifiedprofessionals are developing new products and alsohelp production in setting up networks on turnkeybasis. ITI has been in the forefront in meeting Defencerequirements specifically in the field of encryption.The Company has a workforce of 19000 and has turnoverexceeding Rs. 2000 crore for the past so many years.

The Company offers an entirerange of telecom equipment coveringthe whole spectrum of Switching(Large, Medium and SmallSwitches), Transmission (DigitalMicrowave, Fibre Optic and Satcomproducts), Access products andSubscriber premises equipment. TheCompany has exported its productsand services to Africa and SAARCcountries.

IT I , wh ich ea r l i e r waspredominantly an equipmentmanufacturer, has also made commendable progressin the area of project implementation. The Companyhas provided GSM Cellular infrastructure for MTNLand BSNL on a turn-key basis, covering Delhi, Mumbai,Maharashtra, M.P., Chhattisgarh, Gujarat, Kolkata,Bihar and Jharkhand to serve 1.5 million subscribers. Further expansion is on the anvil.

ITI is also emerging as major player in IT and ITenabled sector. By leveraging its vast experience inTelecom Sector and with its strong R & D, it suppliescustomized IT products like NMS, Encryption, PublicKey Infrastructure and provides complete IT enabledservices.

ITI has been playing a major role in implementingIP based switching in the country. The Company hasexecuted a pilot project for BSNL for the induction ofManaged Leased Line Network (MLLN) and Voiceover Internet Protocol (VoIP) in 9 cities. Further,

large-scale implementation of MLLN to cover 207cities is under completion. ITI has executed the Nation�sfirst Broad-band Multi Protocol Label Switching �Virtual Private Network (MPLS-VPN) for BSNL in10 major cities. Secured connectivity and assuredquality of service are ensured by this type of network.

ITI offers the customized Telecom solutions andsupport to all types of customers. The Company hasa dedicated Network System Unit for carrying out theinstallation and commissioning of equipments and forundertaking turnkey jobs. Some of the most significantprojects executed are the state-of-art SecuredCommunication Network for Defence, Satellite basedSecured Communication Network like CORONATIONand CIVICON for Ministry of Defence and Home

Affairs respectively and alsoINMARSAT monitoring system forthe latter. ITI also provides valueadded services like MRTS & VSAT.

Joint VenturesITI has 3 Joints Ventures (JVs)

namely (i) M/s India SATCOM Ltd.,B a n g a l o r e , ( i i ) M / s . I T ICommunications PTE Ltd., (beingclosed down) and (iii) M/s FIBCOMIndia Ltd., Gurgaon, Haryana. TheCMD of ITI is the Chairman of allthe three JVs. In the first two JVs,

ITI has 49% equity participation while in the third ithas 40% equity participation.

Capital StructureThe Authorised Share Capital of the Company as

on 31.03.2003 was Rs.250 crore made up of 10 crore-

III.3 Indian TelephoneIndustries Limited (ITI)

Minister of state for Communications & IT presents the V&D 100 TOPTelecom Turnkey Services Company of the Year Award to ITI

76

equity shares of Rs.10/- each and 1.5 crore PreferenceShares of Rs.100 each. The Paid-up Share Capital ason that date was Rs.388 crore including Rs.200 croreapplication money received from BSNL towards issueof preference shares pending allotment.

Highlights of Performance: -

● Due to steep decrease in orders for traditional

Switching & Transmission products, the financialperformance during 2002-03 was affected comparedto previous year. But, ITI�s performance has showna marked improvement against the new products likeGSM, WLL Infra, CDMA WLL, MLLN/MLDN &DWDM. Besides, ITI, for the first time, launchedsupply, installation & commissioning of indigenouslydesigned WLL CorDECT equipment.

The details of physical achievements for the year 2002-03 and 2003-04 are as under:

Major Products Accounting 2002-03 2003-04

Unit

OCB-283 LOCAL KL 747.5 109

OCB-283 TAX / TANDEM KC 734.6 456.5

C-DOT EXCHANGES KL 170.6 300.9*

SMPS Rs. Crore 29.98 12.6

DIG.RADIO TX/RX Nos. 8 30

OPTIC FIBRE PDH Nos. 1125 1459

OPTIC FIBRE SDH Nos. 889 994

C-DOT TDMA Nos. - -

WLL- INFRA KL 150 -

GSM KL 608 Rs. 105.38Crs.

CDMA WLL TML K.Nos. 20.5 192.51

CorDECT KL 16 189

MCPC VSAT Nos. 7 -

DLC-SDH Nos. 128 100

LJU K.Nos. 113.4 -

TELEPHONES K.Nos. 1092 310.6

DWDM Nos. 46 -

MLDN / MLLN Rs.Crore 39.29 127.77

VOIP Rs.Crore - -

DOTSOFT / IT Rs.Crore 32.95 43.05

VRLA BATTERY Rs.Crore 3.72 5.82

CIVICON Rs.Crore 19.5 3.34

SMART / SIM CARDS Rs.Crore 13.21 12.4

ASCON Rs.Crore 64.94 19.52

Measures taken for PerformanceImprovement$ Company has signed a License agreement with

global leader ZTE of China for manufacturingCDMA WLL Technology based infrastructure.

$ ITI is planning to be a major supplier of GSMequipments through in-house manufacturing inimmediate future.

$ The company�s efforts to diversify into IT andIT-enable services have led to in-house

77

development of products such as Info-kiosks,Public Key Infrastructure (PKI), Computertelephony Integration (CTI), Call Centre, IP-PABX and e-commerce platform from our R&Dand the newly established Centre for Excellencein ITI.

$ A long-term plan for the company has been drawnfor the 10th Plan period taking into account thecurrent market scenario and future technologyforecasts. This blue print aims at increasing theefficiency and profitability of operations,optimization and rationalization of resources.Company has also drawn a milestone fordiversification into non-telecom products.

$ The Company plans to upgrade its manufacturinginfrastructure to meet International QualityStandards so as to execute electronicmanufacturing services of various vendors.

New Products Introduced during the yearSome of the products that were introduced during theyear are: (i) CorDECT; (ii) CDMA WLL Terminal(FWT); (iii) CDMA WLL Hand Held Terminal; (iv)Public Key Infrastructure (PKI); (v) Info-KIOSK; (vi)IP Phone; (vii) Encryption for Project Coronation;(viii) Higher Order Encryption Systems for Defence;(ix) 2/34 Optimux.

Country 2002-03 2003-04

(Rs. Lakh) (Rs. Lakh)

Uganda 16.64 11.30

Tanzania 2.26 -

Egypt 160.17 6.64

Albania 34.75 0.12

Nepal 66.18 0.22

Bhutan - 9.74

Taiwan - 1.45

Dubai - 85.05

Malaysia - 0.85

Nigeria - 24.20

Netherlands - 79.47

Ethiopia - 9.49

Dalia China - 22.92

USA - 197

Zimbabwe - 0.11

Deemed Export(ONGC) - 190

Total 280.84 638.56

Exports:Exports for the year 2002-03 amounted to Rs.280.84Lakh. During 2003-04, it amounted to Rs.638.56 Lakh.Country wise details of the exports are furnished below:

Signing of License Agreement with ZTE, China for CDMA-2000-1X

78

Financial Review

The highlights of performance for the year 2002-03are as follows: -$ The company has achieved a production of Rs 1690

crore during the year as against Rs.2459 crore duringthe previous year.

$ The company has incurred an after tax loss ofRs. 374.87 crore.

$ During the year, Rs.200 crore have been receivedfrom BSNL towards 7% Cumulative RedeemablePreference Shares. However, the shares are notallotted by the Company as on 31.03.2003 due to

some technical reasons.$ The Company during the year gave VRS to 1199

employees and incurred an expenditure of Rs.49.34crore. Upto 2002-03, the Company has given VRSto 8777 employees.

$ Adequate support from DOT/BSNL, MTNL andBankers.

Financial Performance (Sales)

The Sales Performance of ITI for the year 2001-02,2002-03 as against the target is as under:

Important activities/events

Rs. 418 crore BSNL order for GSM infrastructure

ITI entered into a technical collaboration agreementwith M/s Alcatel for the manufacture of GSMinfrastructure in phases.

Alliance with BSNL for VSAT Services

An MOU was signed with BSNL for implementationof a VSAT-based network in Ku Band for broadbandservices.

New Products From R&D

Wireless Siren System with Simultaneous VoiceBroadcast Facility (Wiss-SVBF)

A presentation and live demonstration to provideabove services was organized by R&D Bangalore. Arecommendation letter has been issued by DirectorGeneral of Civil Defence (DGCD), New Delhi forprocurement of this proprietary product of ITI, whichhas a market potential turnover of Rs. 50 crore overnext two years.

PLANT 2001-02 2002-03

Target Actual (Incl.ED) Target Actual (Incl.ED)

BANGALORE 639.00 677.46 1003.00 253.93

BANGALORE

M.C.D. 0.00 0.00 0.00 0.20

NAINI 226.00 289.72 302.00 255.16

RAE BARELI 262.00 204.66 248.00 71.33

SRINAGAR 7.00 9.51 3.00 3.42

PALAKKAD 246.00 284.05 257.00 283.39

MANKAPUR 573.00 479.99 486.00 484.71

N.S.U. 127.00 100.56 100.00 184.18

E.C.U. 166.00 138.62 216.00 40.72

ROs & OTHERS 155.00 168.60 150.00 217.61

Total 2401.00 2317.17 2765.00 1794.65

(Rs. in crore)

79

Encompassing the technological innovations takingplace in wireless communication, the product scoresover its predecessor EARP system of ITI in providingsoftware programmable timings of different cadences,ability to control a large number of sirens from a singlemaster, easy portability, totally wireless solutionsdispensing the use of wired networks of DOT andembedded with user-friendly operation. The systemwhich caters to the civil defence needs of the countryduring natural calamities, riots, air raid, etc offersflexibility of use for other applications in areas likesteel plants, defence etc.

Terminal End Secrecy Devices (TESD) have a marketpotential of Rs. 50 crore in next two years. This systemprovides end-to-end secure communication for voice/fax/data through a POT exchange and ISDN datathrough ISDN Exchange.

Banking Mechanisat ion Products

ITI made foray into Bank Mechanisation arena bylaunching products such as � Note Counting Machine,Note Bundling Machine, Fake Note Detectors,Biometrics based ATM with Power Invertors (Sparkler)and UPS.

Managing Environment

International Organisation for Standardization hasbrought out Environment Management System StandardISO 14001 to enable the organizations to formulatepolicy and objective, taking into account legislativerequirements and information about significantenvironmental impact and its management. The Bureauof Indian Standards (BIS) has adopted and reissued itas an Indian Standard IS/ISO 14001.

Considering the importance of this issue, ITI hasinitiated action to implement ISO 14001:1996-Environmental Management system in all themanufacturing plants of the Company. Towards thisgoal, Mankapur Plant has already been certified forISO 14001, Palakkad and Bangalore plants are underprocess of implementation.

Manpower Position

The total strength of employees of the Company

at the end of the year 2002-03 was 19,692 as comparedto 21,518 as at the end of previous year.

A total of 1199 Employees have taken VoluntaryRetirement during the year. The total number ofemployees who have opted for VRS from the companysince the scheme was introduced in 1991-92 stood at8,777.

The details of number of Employees belonging toScheduled Caste, Scheduled Tribe, Ex-servicepersonnel, Physically Handicapped and WomenEmployees are given below: -

Women Employees

The Company has given due importance to thewelfare of Women Employees. There are 1346women employees (as on 30-09-2003) and 233physically handicapped employees in ITI. Theimportant welfare amenities being provided includecanteen, transport, township accommodation andmedical facilities etc.

The facilities being provided to persons withdisabilities are as follows: -

1. Physically handicapped employees, who areresiding in the township, are given allowance atthe rate of 5% of the Basic Pay subject tomaximum of Rs.75/- per month.

2. Those employees, who are not residing in theCompany�s township but are utilising Company�stransport for commuting between residence andfactory, are given special allowance at the rateof 5% of Basic Pay subject to maximum ofRs.100/- per month.

CATEGORY 2001-02 2002-03

Scheduled Caste 4075 3654

Scheduled Tribe 157 137

Ex-service personnel 306 229

Physically handicapped 243 233

Women Employees 1463 1362

80

3.Physically handicapped employees are permitted 10minutes grace time at the commencement and closureof the shift.

4.Physically handicapped employees are allottedquarters on out of turn basis.

Awards The Company has received the �V & D 100 TopTelecom Turnkey Services� Award from Hon�bleMinister of State for Communications & IT for theyear 2002-03.

ExhibitionsDuring the year, ITI has participated in the following

prestigious exhibitions in India: -

4th Techno Economic Summit And Expo MUMBAI

11th Convergence India 2003 NEW DELHI

5th International Exhibition & Conference

On �Bank Net� MUMBAI

Conservation of EnergyCompany has undertaken the following energy

conservation measures during the year:

$ Installation of Capacitor Banks to improve Power Factor.

$ Economical running of AC Plant.

$ Use of energy efficient tuberods.

VisionWe will be perceived by our customers as the leading

business partner for providing total network solutions.

We will offer innovative solutions using leading

technologies in a cost competitive manner, to helpcustomers achieve their business objectives.

We will pursue new opportunities arising from theconvergence of Information, Communications andEntertainment business.

We will enhance shareholder value and will moveup the value chain by expanding knowledge-basedand service based business while simultaneouslyleveraging our manufacturing business.

In our manufacturing business, we will continuouslydrive down costs.

We will leverage our telecom domain knowledge tobuild a telecom software business in India cateringto global requirement.

We will apply R&D efforts in focussed areas.

Our target customers will primarily be largeorganisations (both Government and private sector)in India and overseas markets.

For exports, we will primarily target developingmarkets.

We will form strategic alliances with equipment /technology suppliers and service providers to accesstechnology and markets and to help us provide totalsolutions.

We will build a customer-focussed organizationand will invest in regular training and development ofour manpower for achieving the same.

We will transform ITI into a creative, livewire andentrepreneurial enterprise with a quest for growthand with shared values.

ParliamentaryStanding Committeeon IT at BangalorPlant of ITI

81

Introduction

Telecommunications Consultants India Ltd. (TCIL)was incorporated as a wholly owned Government ofIndia Company on March 10, 1978. The Companywas set up with the objective of extending the wide-ranging telecom expertise available with DOT tofriendly developing countries. On August 1, 1978 theCompany commenced its business. The Company hassince then been engaged in adopting world-classcommunication and IT technologies for catering to thelocal needs of countries mainly in the developing world.Year 2003 is a Silver Jubilee Year of its successfulbusiness achievements. Companyhas established the credibility forhaving assured business in WirelessNetworks and in InformationTechnology all over the world.

Mission

The Mission statement of thecompany is to �To excel andmaintain leadership, in providingCommunication Solutions int e l e c o m m u n i c a t i o n a n dinformation technology servicesector globally�.

Objectives-

(i) To provide world-class technology and Indianexpertise globally in all fields of telecommunicationsand information technology.

(ii) To sustain, expand and excel in its operationsin overseas/Indian markets by developing propermarketing strategies.

(iii) To acquire State-of-the-Art technology on acontinuing basis and maintain leadership.

Core Competence

Company is undertaking projects in all the fields oftelecommunications and IT in India and abroad. Thecore competence of the Company is in Network projects,Software Support, Switching and TransmissionSystems, Cellular Services, Rural Telecommunications,

Optical Fibre based backbone network, CDMA basedbasic service networks, Billing, Mediation and customercare systems for different telecom services. Thecompany is also diversifying into other business areassuch as Optical Fibre on ground wire for power utilities,e-governance for State Governments in India andabroad, communication system for Airport Terminalsand Light Houses, construction of roads etc.

Company has also entered into Basic and otherlicensed Services in India/abroad through the JV route. TCIL already has operations of cellular services througha JV in Rajasthan.

Company secures business byparticipating in international andnational competitive bidding. Thecompany is also contributing toprovide strategic communication inthe neighboring countries like Nepal,Afghanistan, Bhutan etc.

Investment by Government inTCIL

Company was incorporated in 1978with a Paid-up Capital of Rs. 10 lakh.In 1982-83, the Paid-up Capital ofthe Company was increased to Rs.30 lakh. The Government�sinvestment in the Company as on date

is only Rs. 30 lakh. The Paid-up Capital after 6 BonusIssues in 1987-88, 1992-93, 1994-95, 1996-97, 2001-02and 2002-03 stands at Rs. 28.80 crore. Company hasbeen paying dividend from the very first full year ofoperations, and, the dividend paid for the last 10 yearshas been 100% or more. The dividend declared for2002-03 was 150%. Company has paid total dividendof over Rs. 120 crore so far to Government of India.

The networth of the Company as on 31.03.2004 isRs. 398 crore (Provisional).

Information Technology ProjectsWith the change in telecom scenario, Company took

a bold step & attempted to enter into diversified areasof operations in Telecom, IT and allied fields. Companyhas also revitalized & restructured the IT Division from

III.4 Telecommunications Consultants India Limited (TCIL)

82

software development to take part in IT & NetworkingProjects, and, made this as a thrust area of development. These initiatives have paid rich dividends, and, havepitch forked Company as a High-Tech Company witha progressive outlook and capable of operating incutting-edge technologies like FTTH. A brief summaryof company�s successful High-Tech initiatives is givenbelow:

i) e-Governance Networks

Company was the consultant to the Government ofGujarat in India to establish the Gujarat State WideArea Network (GSWAN) providing Data, Voice &Video link up from the State-Centre to District Centresto Taluk Centres, with innovative applications. Basedon this experience, the Company has been offered asimilar project in Karnataka State (KSWAN) India,which is under execution. Company has also done forGovernment of Tripura, India a detailed feasibilitystudy for establishing e-Governance Network.Company has taken part in the tender for setting up of�Govt.-Online-Centre� and �Web Portal� for theGovernment of Mauritius, and, consultancy fore-Governance strategy for the State of Kuwait.

ii) Local Area/Wide Area Network Projects

Company has successfully executed the biggest�Fibre to the Desk� solution in the Middle East for thePublic Institute for Social Security (PIFSS) in Kuwaitserving 3500 Nodes. Company is presently executinga Local Area Network project for Government ofMauritius. Many similar projects are expected to betaken up in immediate near future.

iii) Telecom Support Systems

Company had successfully implemented the Re-charge Card Management System (RCMS) andCustomer Care Management System (CCMS) by supplyand implementation of the required hardware andsoftware for enhancing the GSM pre-paid services ofMTNL at Delhi and Mumbai. Company hassuccessfully implemented the SMS rating system andSIM activation system for MTNL Mobile services inDelhi and Mumbai. The commissioning of thesesystems has helped MTNL to enhance their collectionsfrom Mobile services as well as improve the customersatisfaction in a competitive scenario. Company has

also performed the turnkey execution of telecomoperation support system for Wireless service for NepalTelecom Corporation, Swaziland PTC. Company hasalso completed successfully the implementation ofturnkey project for Subscribers� Line ManagementSystem and Billing System for the PTC-Zimbabwe.

iv) Value Added Services

To enhance the utility of Basic services, Companyhas been providing value added services to the existingNetwork of different Circles of BSNL like VoiceResponse System for handling complaints, billingqueries etc. Recently Company has provided a turnkeysolution to MTNL Delhi for providing e-mail facilityover existing telephone lines. This facility providesfor a telephone user to access mails to other telephone& Internet without the need for PC and Internetconnection. You can send voice package of two minutesand the same can also be delivered as an attachment.The system provides for alert to Cellular Subscribersby SMS about the receipt of e-mail. The system can,based on voice commands, read out the e-mail receivedby appropriate �text to speech� conversion software.The system hence provides for a total flexibility foraccessing mails on phone any time anywhere. Thissystem is proposed to be implemented for other Telecomcircles of BSNL in India also.

v) Fibre To The Home (FTTH) Broad BandNetworks �Fibernet�

Company has engineered solution under thebrandname �Fibrenet� for providing Fibre To TheHome in different regions of the State of Kuwait &Kingdom of Saudi Arabia. Broad Band services up tothe subscribers� premises shall be provided to cater tofour telephones, always-on internet, streaming video,HDTV and for other applications like tele-medicine,tele-school etc. The Company expects that with thecommissioning of above projects it will open upimmense opportunities for marketing TCIL�s FTTHsolution �Fibrenet� to other organizations likeARAMCO, OMANTEL, QTEL etc. in the MiddleEast.

vi) Setting up of Cyber City

Company has been awarded prestigious project ofconducting feasibility study and design for �Sudan

83

Electronic City (SEC)�, a high technology duty freezone. Company expects to take up the entire work ofexecution after the feasibility study and design.Company is exploring similar opportunities in othercountries like Algeria, Iran etc.

vii) Call Centre

Company was the consultant to the Ministry ofAgriculture to establish �Kisan Call Centres� at differentlocations so as to serve as an easy access point for thefarmers all over the country. Company wassubsequently appointed as Turnkey solution providerfor this project. Company got the project implementedin a record time of less than 4 weeks. The project wasinaugurated by Hon�ble Prime Minister of India on21.01.2004.

Company has been shortlisted as technically qualifiedbidder in number of large IT and NW projects in Indiaand abroad. Company expects major expansion in thearea of IT and Networking in coming years and majorturnovers are expected from this area.

Overseas Operations Company has worked in 55 countries so far. Thepresent on going operations are in Mauritius,Madagascar, Kingdom of Saudi Arabia, Kuwait, Ghana,Republic of Yemen, Oman, Zimbabwe, Algeria, Nepal,Botswana, Bhutan, Ethiopia, Nigeria, Togo, Kyrgyzstan,East Timor, Kosovo, Lebanon, Congo, Sierra Leone,Afghanistan, Niger, Sudan and Libya.

HIGHLIGHTS: 2003-04

" Record foreign exchange repatriation of Rs. 68.96crore.

" Networth of the Company has increased fromRs.387.52 crore in 2002-03 to Rs. 398 crore(Provisional) in 2003-04.

" TCIL�s export turnover contributes 65% of the totalturnover during the year 2003-04.

" Award of contract of Cable Access Network in Ghana valued at Rs. 279 crore.

" TCIL was awarded an advanced technology contractof Fibre to Home (FTTH) in Kuwait valued at

Rs. 78 crore.

" Modernisation of Police Communication Systemfor State Govternment of Jharkhand � Project cost

Rs. 55 crore" e-Governance Project in Jharkhand valued at Rs.27

crore.

" Company has successfully completed GSM Contractin Bhutan ahead of time schedule.

" Company has secured contracts for supply and turnkey installations for UN Peace Keeping Missions.

" As per provisional accounts for the year 2003-04, company is likely to be adjudged �Excellent� underMOU Evaluation criteria.

" Order booking during the year 2003-04 amountedto Rs. 885 crore.

" Company has successfully completed 25 years of its operations.

" United Telecom Limited, a joint venture companyin Nepal has launched its services in September 2003. By December 2003 end, it has 11,000 subscribers.

" TCIL made entry in new countries i.e. Niger, Sudanand Libya.

" Company has declared 6th Bonus Issue in the ratioof 1:1.

" Company has diversified its operations to Civil andArchitectural Work and secured orders ofRs. 93.75 crore.

Financial Performance � Highlights(All figures in Crore)

2000-01 2001-02 2002-03Turnover/ MOU Target Rs. 776.15/760.00 720.43/ 800.00 590.45/ 980.00 Profit before tax/ MOU Target Rs. 63.15/ 61.50 63.61/ 53.00 51.50/ 45.00Amount of dividend Rs. 21.60 21.60 21.60Rate of Bonus to Employees % age 20% 20% 20%Foreign ExchangeRepatriated to India Rs. 63.03 63.89 63.37Networth / MOU Target Rs. 332.41/ 306.00 368.30/ 347.00 387.52/ 373.00

84

The access network through wireless technology inthe basic service sector has been continuously on thedecline, while the wireless access is proliferating allover the country. The basic service licensees areproviding basic service by using CDMA � WLLtechnology. The spread of wireless access has beenresponsible for covering remote areas and the networkgrowth in basic service has been phenomenal by theadoption of this technology. The adoption of this

technology has resulted in substantial reduction in thejelly filled cable and other associated wirelessinfrastructure, which was being used conventionallyfor providing connectivity to the subscribers. Theresultant change over of the technology has affectedthe inland business of TCIL, which has sharply declinedfrom Rs. 3241 Million in 2001-02 to Rs. 2232 Millionin 2002-03. Company anticipates further reduction ininland business in the year 2003-04 also.

Major orders booked during 2003-04 are as under:

i) OSP contract in Ethiopia valuing US$ 7 million (equivalent to Rs. 34.25 crore)

ii) Contract for Underground Fibre Optic Cable forPGCIL valuing Rs. 25 crore.

iii) Junction Project in Saudi Arabia valuing SR 8 million(equivalent to Rs. 10.32 crore)

iv) Hardware & Manpower Supply contracts from UNvaluing Rs. 57.85 crore.

v) Installation of civil works and optical fibre cableplants BTC Botswana for Rs. 3.86 crore.

vi) VSAT Antenna System for ETC, Ethiopia for Rs. 3crore.

vii) Establishment of LAN for Vidhan Soudha Karnataka- Project cost Rs. 0.60 crore. TCIL shall be providingconsultancy.

viii) Modernization of Police Communication System forState Government of Jharkhand � Project cost Rs.55 crore.

ix) e-Governance project in Jharkhand valued at Rs.27crore.

x) Setting up and running of computer training centresat Heart and Kandhar, Afghanistan for Rs.1.11 crore.

xi) Supply, installation and commissioning of T.V.Matrix Patch Panel Project of QTEL � Qatar valuingRs. 85 lakh.

xii) Preventive Maintenance of Customers Lines inMauritius for Rs. 2.75 crore.

xiii) Access Network in Nigeria valuing Rs. 12.75 crore.

xiv) Cable Access Network project in Ghana valuingRs. 279 crore intends to award to TCIL.

xv) Communication Cabling Infrastructure for EbeneCybercity in Mauritius valuing Rs. 3.47 crore.

xvi) Civil Engineering and Cable Works in Mauritiusvaluing Rs. 3.61 crore.

xvii) Consultancy for setting up Cyber-city in Sudanvaluing Rs. 1.05 crore.

xviii) Turnkey Implementation/Operation of Kisan Call

Order Booking

Financial Performance for 2003-04

(All figures in crore)

MOU Target 2003-04 2002-032003-04

Turnover* Rs. 980.00 716.55 657.45

Profit before tax Rs. 34.50 45.04 51.50

Foreign Exchange repatriated to India Rs. 68.96 63.37

* Including share in JVs Turnover

85

Centre for Ministry of Agriculture valuing Rs. 1.50crore (Consultancy Project).

xix) Construction of TV Tower for Prasar Bharti valuingRs. 3.83 crore.

xx) MTNL Trench Less works amounting to Rs. 1.15crore.

xxi) Emergency Restoration of Telecommunications inAfghanistan valued at Rs 59.78 crore.

xxii) Fibre to Home (FTTH) Pilot Project in Kuwait forRs 5.00 crore.

xxiii) Road Construction work for Pradhan Mantari GramSadak Yojana in Khandwa, Madhya Pradesh andBarawaadda-Panjegarh valued at Rs. 5.14 crore andRs. 12.71 crore respectively.

xxiv) Fibre to Home (FTTH) Project in Kuwait valuedat Rs. 78.64 crore.

xxv) Hardware and manpower supply contracts from UNvaluing Rs.27.51 crore.

Women�s Employment and Persons with Disabilities

Out of total working strength of 770 employees, 64are women employees in which 43 women are inExecutive cadre.

i. Schemes for the benefit of persons with disabilities

In TCIL, one woman with hearing impairment disabilityhas been appointed and given equal opportunity.

ii. Per Capita expenses, resources available for theirutilization

About Rs.1000/- per head.

iii.Expenses incurred so far

Almost Rs. 50,000/- incurred so far.

Joint Ventures of TCIL

i) Hexacom India Ltd.

TCIL is operating Cellular telephones throughHEXACOM INDIA LTD, a Joint Venture promotedby TCIL in collaboration with Shyam Telecom andTIW of Canada. Presently Hexacom India Ltd. isoperating in the State of Rajasthan in 48 cities andsubscriber base is around 2,57,000 with 65% marketshare. During 2002-03, the company has achieved aturnover of Rs.119.56 crore and profit of Rs.22.38

crore (Before Tax). Company has achieved a turnoverof Rs. 146.50 crore (provisional) during the year2003-04.

ii) Tamilnadu Telecommunications Ltd.(TTL)

Tamilnadu Telecommunications Ltd. (TTL) waspromoted with Tamilnadu Industrial DevelopmentCorporation (TIDCO). Company has diversified itsoperations by manufacturing of Optic Fibre Cablesand has also expanded its capacity of Jelly Filled Cableto 17 LCKM. 17200 KM of optical fibre cable hasalso been produced in factory so far. TCIL has aninvestment of Rs. 6.95 crore in TTL. During the year2002-03, the Company has achieved turnover of Rs.44.98 crore. Due to slump in demand and consequentfall in prices, loss of Rs. 17.72 crore was incurred byTTL. Company has achieved a turnover of Rs. 30.54crore (provisional) during the year 2003-04.

iii) TCIL Bellsouth Ltd.

TCIL had promoted TCIL BELLSOUTH LTD.(TBL) with BellSouth of USA. TCIL�s share in theequity of this company is Rs. 84 lakh. TBL has executedprojects in a number of countries including Malaysia,Palestine and Zimbabwe. The projects in Swazilandand Nepal are in advanced stage of completion. Thecompany has also recently been awarded a project inMalawi. The Company has shown steady progress forthe last 6 years and during the year 2002-03, thecompany registered a turnover of Rs.14.79 crore andnet profit of Rs. 0.45 crore. Company has achieveda turnover of Rs. 5.00 crore (provisional) during theyear 2003-04.

iv) TCIL Saudi Co. Ltd.

Company has formed a Joint Venture Companyviz. TCIL SAUDI CO. LTD. (TSCL) wherein TCIL�sequity is 40%. NATEL the other partner is having 60%equity. NATEL had expressed desire to leave the JVCas partner. Pending their replacement by another suitablepartner, the JVC has made an arrangement with NATELthat TCIL shall secure the contracts and execute thesame in the name of TSCL and shall be responsiblefor the profits and losses and NATEL shall have nosay in the Management and NATEL shall be paid a

86

sponsorship fee of 2.5% of value of such contracts. Assuch, 97.5% of the turnover obtained through TSCLhas been merged with TCIL operations. TCIL in itsown name is also executing projects as subcontractsundertaken from KANAL and others. During the year2002-03, company has achieved a turnover of Rs. 21.58crore and profit of Rs. 4.23 crore. Company hasachieved a turnover of Rs. 24.58 crore (provisional)during the year 2003-04.

v) United Telecom Ltd.

TCIL in association with Mahanagar TelephoneNigam Limited (MTNL), Videsh Sanchar NigamLimited (VSNL) and Nepal Ventures Pvt. Ltd. (NVPL)formed the JV Company called United Telecom Ltd.

The Company has been awarded a license for providingBasic Telecom Services in the Kingdom of Nepal basedon CDMA technology for providing Wireless in LocalLoop. UTL has launched its services in September2003. By December 2003 end, it has 11,000 subscribers.

vi) Intelligent Communication Systems IndiaLtd. (ICSIL)

TCIL has a share-holding of 36% in this companyvaluing at Rs. 36 lakh. During the year 2002-03,company has achieved a turnover of Rs. 16.88 croreand profit of Rs. 56.63 lakh. Company has achieveda turnover of Rs.25.33 crore (provisional) during theyear 2003-04.

* * *

87

IV. Graphs and Charts

Figure-1 GROWTH OF TELECOM NETWORK [PSUs & PRIVATE] 89

Figure-2 Share of PSUs (BSNL & MTNL) in Mobile Phones Segment ( in percent) 90

Figure-3 WORKING LINES (DIRECT EXCHANGE LINES) (in '000 91

Figure-4 FIXED LINE TELEPHONES AND CELLULAR MOBILE PHONES - (PSUs & Pvt.) 92

Figure-5 DISTRIBUTION OF DIRECT EXCHANGE LINES (DELs)[Fixed+WLL+CMPs] 93

Figure-6 DISTRIBUTION OF DIRECT EXCHANGE LINES (DELs)[Fixed+WLL+CMPs] 93

Figure-7 COVERAGE OF VILLAGES BY VPTs (AS ON 31st MARCH'2003). 94

Figure-8 COVERAGE OF VILLAGES BY VPTs (AS ON 31st MARCH'2004). 94

Figure-9 PHONE FAULTS 95

Figure-10 STAFF PER 1000 DELs 96

Figure-11 DISTRIBUTION OF GROUP-WISE STAFF STRENGTH OF DOT & BSNL 97

Figure-12 DISTRIBUTION OF MANPOWER (As on 31st March, 2003) 98

Figure-13 TELE-DENSITY (Number of Telephones per 100 Population) SINCE 1995-96 99

Figure-14 EXPORT OF TELECOM EQUIPMENTS AND SERVICES 100

Figure-15 FDI INFLOW YEAR-WISE [AUGUST'1991 TO JANUARY'2004] 101

Figure-16 FOREIGN DIRECT INVESTMENT APPROVAL (AUGUST'1991 - JANUARY'2004) 102

Figure-17 NO. OF INLAND TELEGRAMS BOOKED [In Lakh] 103

89

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18.2

18.3

17.6

17.2

15.8

17.4

16.4

15.5

13.8

12.5

10.5

9.5

96

Fig

ure

- 10

STA

FF

PE

R 1

000

DE

Ls

(BSN

L &

MT

NL

)

74

6457

4943

3529

2420

1512

98

01020304050607080

1990

-91

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

YE

AR

97

Fig

ure

- 11

DIS

TR

IBU

TIO

N O

F G

RO

UP

-WIS

E S

TA

FF

ST

RE

NG

TH

OF

DO

T &

BSN

L(A

s on

31s

t M

arch

, 200

3)

8010

355

503

2661

81

3112

9280

Gr.

-"A

"G

r.-"

B"

Gr.

-"C

"G

r.-"

D"

Indu

stri

al W

orke

rs

98

Fig

ure

- 12

DIS

TR

IBU

TIO

N O

F M

AN

PO

WE

R (

As

on 3

1st

Mar

ch, 2

003)

BSN

LM

TN

LD

OT

DOT

1%

BSNL

85%

MTN

L 14

%

99

FIG

UR

E 1

3T

EL

E-D

EN

SIT

Y (

Num

ber

of T

elep

hone

s pe

r 10

0 P

opul

atio

n) S

INC

E 1

995-

96

3.58

4.29

5.11

7.02

8.23

10.37

12.20

14.32

20.79

0.93

1.21

1.49

1.55

2.86

2.33

1.94

1.56

1.28

6.87

5.78

4.76

3.95

0.68

0.52

0.43

0.34

0.29

0510152025

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

YEAR

TELE-DENSITY

TO

TA

L

TE

LE

-DE

NSI

TY

UR

BA

N

TE

LE

-DE

NSI

TY

RU

RA

L

TE

LE

-DE

NSI

TY

100

FIG

UR

E-1

4 E

XP

OR

T O

F T

EL

EC

OM

EQ

UIP

ME

NT

S A

ND

SE

RV

ICE

S

598

1108

1458

2232

2376

3230

2882

4149

3050

327

337

378

368

235

270

313

383

207

402

310

240

296

250

180

450

150

131

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

YE

AR

(Rs. in Crore)

Serv

ice

Con

sulta

ncy

Har

dwar

e

101

FIG

UR

E-1

5 F

DI

INF

LO

W Y

EA

R-W

ISE

[A

UG

UST

'199

1 T

O J

AN

UA

RY

'200

4]

9876

.5

2232

8.4

4509

7.3

8480

6.3

20.6

160.

822

28.2

4008

4.8

4221

1.5

9562

1.3

9863

5.3

9872

5.3

0

2000

0

4000

0

6000

0

8000

0

1000

00

1200

00

Aug

.'199

319

9419

9519

9619

9719

9819

9920

0020

0120

0220

03Ja

n.'2

004

YE

AR

AC

TU

AL

FD

I IN

FL

OW

(Rs. in Million)

102

0

1000

0

2000

0

3000

0

4000

0

5000

0

6000

0

7000

0

8000

0

9000

0

1000

00

Rad

io P

agin

g Se

rvic

eC

ellu

lar/

Bas

ic T

elep

hone

Ser

vice

Man

ufac

turi

ng a

nd o

ther

VA

S se

rvic

es

(Rs. in Crore)

FIG

UR

E-1

6F

OR

EIG

N D

IRE

CT

IN

VE

STM

EN

T A

PP

RO

VA

L (

AU

GU

ST'1

991

- JA

NU

AR

Y'2

004)

103

Fig

ure

- 17

NO

. OF

IN

LA

ND

TE

LE

GR

AM

S B

OO

KE

D [I

n L

akh]

651

646

606

576

0

100

200

300

400

500

600

700

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

YE

AR

442

404

344

230

209

512

539

570

105

Table 1 Telephone per 100 Population � Urban/Rural (Teledensity) 107

Table 2 Number of Telephones-Urban/Rural 108

Table 3 Number of Villages with Direct Access to Telecom Facilities 109

Table 4 Number of Telegraph Offices (CTOs, TOs, TCs & COs) 110

Table 5 Number of Employees � Scheduled Caste/Tribe, Exservicemen

(Abled & disabled), Women and their percentage to respective number

(including industrial workers) 111

Table 6 Number of Disabled Employees (including DOT, BSNL & MTNL) 111

Table 7 Performance Indicators 112

Table 8 Relative performance 113

V. Statistical supplement

107

Sl.

Cir

cles

/Sta

tes

Tel

e-D

ensi

ty

Tot

al T

elep

hone

s%

of R

ural

DE

Ls

No.

to O

vera

ll D

EL

sO

vera

ll U

rban

Rur

alO

vera

llU

rban

Rur

al

2003

2004

2003

2004

2003

2004

2003

2004

2003

2004

2003

2004

2003

2004

1A

ND

AM

AN

& N

ICO

BA

R10

.15

11.5

614

.82

17.5

07.

748.

4037

980

4429

318

871

2327

219

109

2102

150

.31%

47.4

6%

2A

ND

HR

A P

RA

DE

SH5.

667.

8515

.42

22.7

02.

032.

3344

0417

961

8886

932

5243

448

5352

211

5174

513

3534

726

.15%

21.5

8%

3A

SSA

M1.

942.

1311

.54

12.4

70.

500.

5653

6832

5994

9141

6886

4641

7511

9946

1353

1622

.34%

22.5

7%

4B

IHA

R1.

321.

678.

4611

.64

0.48

0.50

1150

235

1489

300

7745

8210

9250

837

5653

3967

9232

.66%

26.6

4%

5C

HH

AT

TIS

GA

RH

1.47

1.63

5.55

6.02

0.40

0.47

3154

4635

7239

2467

6527

5932

6868

181

307

21.7

7%22

.76%

6G

UJA

RA

T

7.77

10.1

416

.44

22.4

62.

482.

5241

3134

855

0178

333

1306

646

5546

181

8282

8463

2219

.81%

15.3

8%

7H

AR

YA

NA

6.21

8.38

15.3

022

.01

2.32

2.42

1377

696

1905

951

1017

188

1523

841

3605

0838

2110

26.1

7%20

.05%

8H

IMA

CH

AL

PR

AD

ESH

8.50

10.1

436

.08

51.1

25.

435.

5153

4309

6473

8122

7368

3312

2830

6941

3161

5357

.45%

48.8

4%

9JA

MM

U &

KA

SHM

IR2.

483.

018.

3410

.12

0.52

0.61

2640

7732

8750

2227

0327

8623

4137

450

127

15.6

7%15

.25%

10JH

AR

KH

AN

D1.

682.

006.

117.

340.

400.

4547

3349

5746

9638

5571

4747

5587

778

9994

118

.54%

17.3

9%

11K

AR

NA

TA

KA

6.67

9.46

14.7

822

.58

2.37

2.41

3634

888

5238

457

2790

329

4371

126

8445

5986

7331

23.2

3%16

.56%

12K

ER

AL

A

11.3

314

.87

21.2

832

.82

7.85

8.60

3681

305

4875

828

1792

141

2783

876

1889

164

2091

952

51.3

2%42

.90%

13M

AD

HY

A P

RA

DE

SH3.

023.

999.

6812

.91

0.56

0.68

1907

635

2577

355

1649

008

2257

661

2586

2731

9694

13.5

6%12

.40%

14M

AH

AR

ASH

TR

A

6.08

8.00

14.9

619

.99

2.19

2.31

5170

868

6930

891

3919

048

5574

040

1251

820

1356

851

24.2

1%19

.58%

15N

OR

TH

-EA

ST- I

3.

003.

359.

8810

.89

0.95

1.08

1997

5522

7526

1508

3217

1242

4892

356

284

24.4

9%24

.74%

16N

OR

TH

-EA

ST- I

I2.

352.

718.

229.

070.

791.

0113

8134

1646

5210

1482

1160

9636

652

4855

626

.53%

29.4

9%

17O

RIS

SA2.

292.

9510

.12

13.8

60.

870.

9586

5881

1133

495

5870

4482

4853

2788

3730

8642

32.2

0%27

.23%

18PU

NJA

B

11.7

617

.33

23.9

938

.25

4.60

4.81

3078

825

4619

822

2320

247

3817

292

7585

7880

2530

24.6

4%17

.37%

19R

AJA

STH

AN

3.47

4.50

10.7

314

.83

1.25

1.32

2064

943

2742

619

1498

178

2127

280

5667

6561

5339

27.4

5%22

.44%

20T

AM

IL N

AD

U

6.22

8.54

12.2

817

.21

2.12

2.35

3599

903

4988

595

2869

975

4188

914

7299

2879

9681

20.2

8%16

.03%

21U

TT

AR

AN

CH

AL

4.25

5.10

12.5

715

.17

1.30

1.48

3734

3945

6245

2892

1535

8920

8422

497

325

22.5

5%21

.33%

22U

TT

AR

PR

AD

ESH

- [E

& W

]2.

152.

968.

1212

.24

0.56

0.47

3746

736

5273

067

2970

363

4607

229

7763

7366

5838

20.7

2%12

.63%

23W

EST

BE

NG

AL

1.

852.

187.

829.

790.

890.

9512

9066

015

4582

875

8192

9681

7053

2468

5776

5841

.26%

37.3

7%

24K

OL

KA

TT

A13

.47

18.9

213

.47

18.9

20.

000.

0018

4761

726

4286

418

4761

726

4286

40

00.

00%

0.00

%

25C

HE

NN

AI

22.9

738

.81

22.9

738

.81

0.00

0.00

1528

071

2626

175

1528

071

2626

175

00

0.00

%0.

00%

26D

EL

HI

27.3

841

.79

29.2

444

.48

0.00

0.00

4078

904

6463

003

4078

904

6463

003

00

0.00

%0.

00%

27M

UM

BA

I 24

.22

36.0

824

.22

36.0

80.

000.

0041

8425

763

9533

341

8425

763

9533

30

00.

00%

0.00

%

AL

L- I

ND

IA5.

117.

0214

.32

20.7

41.

491.

5754

6172

7276

5395

0843

2103

3764

2673

9111

4069

3512

2721

1720

.89%

16.0

3%

*Inc

ludi

ng P

ublic

DEL

s, P

vt. D

ELs,

CM

Ps a

nd W

LL (

Fixe

d &

Lim

ited)

.

Tab

le -

1

Tel

epho

ne p

er 1

00 P

opul

atio

n-U

rban

/Rur

al (T

ele-

dens

ity)

* A

s on

Mar

ch 3

1, 2

003

and

2004

108

Sl. Circles/States Basic Phones = Fixed DELs+WLL Cellular Mobile Phones [CMPs] TOTAL

No. TELEPHONES

TOTAL [PSUs�] URBAN [PSUs] RURAL [PSUs�] Private Operators TOTAL PSUs Private Operators

2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004 2003 2004

1 A & N 35897 38206 16788 17185 19109 21021 0 0 2083 6087 2083 6087 0 0 37980 44293

2 A. P. 3256173 3215027 2104428 1879680 1151745 1335347 264681 1072338 883325 1901504 217106 567877 666219 1333627 4404179 6188869

3 ASSAM 489501 513061 369555 377745 119946 135316 0 0 47331 86430 0 26211 47331 60219 536832 599491

4 BIHAR 921451 954447 545798 557655 375653 396792 0 121766 228784 413087 44572 155175 184212 257912 1150235 1489300

5 CHHATTISGARH 299953 325167 231272 243860 68681 81307 0 0 15493 32072 15493 32072 0 0 315446 357239

6 GUJARAT 2978506 2775390 2160224 1929068 818282 846322 107616 653358 1045226 2073035 275691 482113 769535 1590922 4131348 5501783

7 HARYANA 1090981 1140568 730473 758458 360508 382110 42149 221302 244566 544081 77347 192464 167219 351617 1377696 1905951

8 H. P. 473619 476793 166678 160640 306941 316153 0 1680 60690 168908 22274 72625 38416 96283 534309 647381

9 J & K 264077 288650 222703 238523 41374 50127 0 0 0 40100 0 40100 0 0 264077 328750

10 JHARKHAND 441596 472218 353818 372277 87778 99941 0 0 31753 102478 31753 102478 0 0 473349 574696

11 KARNATAKA 2753499 2752060 1908940 1884729 844559 867331 59976 724982 821413 1761415 200205 330196 621208 1431219 3634888 5238457

12 KERALA 3020911 3258164 1131747 1166212 1889164 2091952 0 350969 660394 1266695 203931 373752 456463 892943 3681305 4875828

13 M. P. 1255017 1355854 996390 1036160 258627 319694 228342 444391 424276 777110 64542 120839 359734 656271 1907635 2577355

14 MAHARASHTRA 3937525 3945952 2685705 2589101 1251820 1356851 233397 650404 999946 2334535 275533 610471 724413 1724064 5170868 6930891

15 NORTH-EAST- I 191063 204999 142140 148715 48923 56284 0 0 8692 22527 0 12160 8692 10367 199755 227526

16 NORTH-EAST- II 138134 156548 101482 107992 36652 48556 0 0 0 8104 0 8104 0 0 138134 164652

17 ORISSA 734499 780708 455662 472066 278837 308642 0 82148 131382 270639 70332 163544 61050 107095 865881 1133495

18 PUNJAB 2049356 2022857 1290778 1220327 758578 802530 111647 539169 917822 2057796 161706 294317 756116 1763479 3078825 4619822

19 RAJASTHAN 1732570 1811220 1165805 1195881 566765 615339 86011 320510 246362 610889 85117 221387 161245 389502 2064943 2742619

20 TAMIL NADU 2889897 2867096 2159969 2067415 729928 799681 94973 493689 615033 1627810 160089 400137 454944 1227673 3599903 4988595

21 UTTARANCHAL 347014 370813 262790 273488 84224 97325 0 0 26425 85432 26425 85432 0 0 373439 456245

22 U. P. - [E] 1793522 1749345 1194009 1270019 599513 479326 0 298223 263883 809287 127905 345221 135978 464066 2057405 2856855

23 U. P. - [W] 1260932 1279630 1084072 1093118 176860 186512 0 203908 428399 932674 102128 295266 326271 637408 1689331 2416212

23 WEST BENGAL 1145825 1216317 613357 638659 532468 577658 0 49567 144835 279944 72897 168135 71938 111809 1290660 1545828

24 KOLKATTA 1353441 1386559 1353441 1386559 0 0 0 370405 494176 885900 19159 26401 475017 859499 1847617 2642864

25 CHENNAI 1077918 1036780 1077918 1036780 0 0 0 603910 450153 985485 0 121553 450153 863932 1528071 2626175

26 DELHI 2194859 2002655 2194859 2002655 0 0 77886 1220108 1806159 3240240 132417 170089 1673742 3070151 4078904 6463003

27 MUMBAI 2495221 2471281 2495221 2471281 0 0 0 1093911 1689036 2830141 159500 190461 1529536 2639680 4184257 6395333

ALL- INDIA 40622957 40868365 29216022 28596248 11406935 12272117 1306678 9516738 12687637 26154405 2548205 5614667 10139432 20539738 54617272 76539508

*Including Public DELs, Pvt. DELs, CMPs and WLL ( Fixed and Limited).

Number of Telephones*- Urban/Rural As on March 31, 2003 and 2004

Table - 2

109

Tab

le -

3

Num

ber

of V

illag

es w

ith

Dir

ect

Acc

ess

to T

elec

om F

acili

ties

NA

= N

ot A

pplic

able

Sl.

Cir

cles

/Sta

tes

No.

of

Vill

ages

cov

ered

with

VPT

s as

on

31st

Mar

ch

PCO

sN

o.V

illag

es

Publ

icPr

ivat

eT

OT

AL

VPT

s(L

ocal

+ST

D+H

ighw

ay)

2003

2004

2003

2004

2003

2004

31.0

3.20

0331

.03.

2004

1A

ndam

an &

Nic

obar

201

198

198

00

198

198

716

898

2A

ndhr

a Pr

ades

h29

460

2341

923

419

1314

1408

2473

324

827

1339

3417

7382

3A

ssam

2468

518

025

1937

90

018

025

1937

914

522

1776

24

Bih

ar

4107

738

475

3847

50

038

475

3847

543

063

4758

45

Chh

attis

garh

1972

014

665

1466

50

014

665

1466

559

3475

266

Guj

arat

1812

511

214

1121

439

3941

1415

153

1532

886

402

1123

767

Har

yana

6850

6811

6811

00

6811

6811

2595

331

723

8H

imac

hal P

rade

sh16

925

1658

516

587

00

1658

516

587

7199

8164

9Ja

mm

u &

Kas

hmir

6764

4249

4786

00

4249

4786

1199

014

185

10Jh

arkh

and

3170

326

270

2690

40

026

270

2690

410

968

1312

911

Kar

nata

ka27

066

2706

627

066

00

2706

627

066

1023

2216

4355

12K

eral

a14

6814

6814

680

014

6814

6859

545

7452

913

Mad

hya

Prad

esh

5180

637

597

3760

134

861

137

945

3821

242

337

4607

814

Mah

aras

htra

4246

731

541

3154

118

9426

4333

435

3418

416

4950

2231

8115

Nor

th-E

ast-

I71

2533

4241

890

033

4241

8932

5440

7116

Nor

th-E

ast-

II70

2023

4432

510

023

4432

5138

1644

8517

Ori

ssa

4698

940

435

4075

30

040

435

4075

322

590

2717

118

Punj

ab12

687

1268

712

687

831

879

1351

813

566

4062

344

095

19R

ajas

than

3948

323

858

2385

810

1630

1024

874

2686

849

687

5868

420

Tam

il N

adu

1789

917

899

1789

90

017

899

1789

997

129

1237

8121

Utta

ranc

hal

1561

011

630

1172

90

011

630

1172

985

7410

553

22U

ttar

Prad

esh(

E)

7979

275

965

7600

00

075

965

7600

068

290

8469

323

Utta

r Pr

ades

h(W

)23

604

2126

821

268

00

2126

821

268

4345

551

966

24W

est B

enga

l38

337

3730

637

306

00

3730

637

306

2733

634

548

25K

olka

ta43

743

743

70

043

743

752

981

6252

126

Che

nnai

NA

00

00

00

6809

874

246

27D

elhi

191

191

191

00

191

191

7318

289

752

28M

umba

iN

A0

00

00

013

1251

1499

02A

ll-In

dia

6074

9150

4945

5096

8293

4212

665

5142

8752

2347

1400

101

1759

340

110

Sl. Circles/States CTOs TOs TCs COsNo. 2003 2004 2003 2004 2003 2004 2003 20041 Andaman & Nicobar 0 0 1 1 0 0 20 202 Andhra Pradesh 9 9 109 107 192 190 1518 15183 Assam 3 3 26 26 12 12 242 2324 Bihar 12 12 28 28 18 18 3358 33585 Chhattisgarh 1 1 10 10 7 6 88 826 Gujarat 5 5 35 35 11 11 2250 22507 Haryana 3 3 14 14 2 1 193 1778 Himachal Pradesh 1 1 12 12 14 14 1218 7129 Jammu & Kashmir 2 2 7 7 5 3 129 12910 Jharkhand 5 5 14 14 10 10 61 6111 Karnataka 5 5 64 64 27 27 4131 413112 Kerala 3 3 36 36 101 100 1837 183713 Madhya Pradesh 4 4 52 52 45 44 496 49614 Maharashtra 10 10 89 87 31 29 2145 188915 North-East-I 2 2 4 4 6 6 153 15316 North-East-II 0 0 7 7 2 2 58 5817 Orissa 3 3 27 27 7 7 3397 339718 Punjab 5 5 22 22 23 13 332 33219 Rajasthan 5 5 42 42 47 43 1260 65520 Tamil Nadu 15 15 93 93 62 57 2917 264221 Uttaranchal 1 1 15 15 20 19 292 12822 Uttar Pradesh(E) 5 5 64 64 113 103 3685 368523 Uttar Pradesh(W) 4 4 30 30 53 53 119 8424 West Bengal 2 2 42 42 15 15 1974 1974

25 NTR-Delhi 1 1 24 21 20 17 4 4

All-India 106 106 867 860 843 800 31877 30004

Number of Telegraph Offices (CTOs, TOs, TCs AND COs)

as on 31st March

Table - 4

111

Table - 5

Number of Employees- Scheduled Caste/Tribe, Exservicemen (Abled & Disabled), March 2003Women and their percentage to respective numbers (including industrial workers)

Group No. of Employees TOTAL Scheduled % to Total Scheduled % to Total

Employees Caste Employees Tribe Employees

DOT BSNL MTNL

A 1126 7026 1128 9280 1656 17.84% 474 5.11%

B 2277 46797 6429 55503 6917 12.46% 1636 2.95%

C 624 231656 33901 266181 46337 17.41% 12191 4.58%

D 388 66301 16526 83215 17715 21.29% 4214 5.06%

Total 4415 351780 57984 414179 72625 17.53% 18515 4.47%

Table - 6Number of Disabled Employees as on 31st March 2003

(Including DOT, BSNL & MTNL)

Strength

Class Difference

% of Sanctioned Working

Blindness of Low Vision 1322 85 1237

Hearing Impairment 1320 50 1270

Locomotors Disability or Cerebral Palsy 1324 408 916

Total 3966 543 3423

Group TOTAL Ex-servicemen % to Total Ex-servicemen % to Total Women % to TotalEMPLOYEES (Abled) Employees (Disabled) Employees Employees Employees

A 9280 13 0.14% 0 0.00% 348 3.75%

B 55503 142 0.26% 4 0.01% 5849 10.54%

C 266181 2502 0.94% 57 0.02% 38011 14.28%

D 83215 942 1.13% 7 0.01% 9278 11.15%

Total 414179 3599 0.87% 68 0.02% 53486 12.91%

112

Tab

le-7

PER

FOR

MA

NC

E I

ND

ICA

TO

RS

Item

sPe

rcen

tage

Uni

t19

90-9

119

91-9

219

92-9

319

93-9

419

94-9

519

95-9

619

96-9

719

97-9

819

98-9

919

99-0

020

00-0

120

01-0

220

02-0

320

03-0

4Ch

ange

over

prev

ious

year

1.1

Equ

ippe

d C

apac

ity [P

SUs�

onl

y](�

000)

5823

.93

6783

.94

7968

.31

9795

.17

1202

5.24

1462

7.14

1774

1.77

2126

0.50

2605

0.41

3276

7.72

3997

3.79

4666

2.56

5456

4.34

6002

4.67

10.0

1

1.2

Dir

ect E

xcha

nge

Lin

es(D

EL

s) [I

nclu

des F

ixed

+WL

L+C

MPs

of P

SUs &

Pvt

.](�

000)

5074

.30

5809

.90

6796

.70

8025

.60

9795

.30

1197

8.40

1488

1.63

1868

4.02

2281

2.98

2853

7.20

3627

9.21

4496

7.71

5461

7.27

7653

9.51

40.1

4

1.3

Tel

epho

ne W

aitin

g L

ist [

Fixe

d L

ines

] [PS

Us�

onl

y](�

000)

1960

.50

2289

.80

2845

.90

2496

.80

2152

.90

2277

.00

2894

.20

2705

.70

1983

.00

3680

.60

2916

.72

1687

.18

1810

.07

1791

.49

-1.0

3

1.4

Reg

iste

red

Dem

and

*(�

000)

7034

.80

8099

.70

9642

.60

1052

2.40

1194

8.20

1425

5.40

1777

5.83

2138

9.72

2479

5.98

3221

7.80

3919

5.92

4665

4.89

5642

7.34

7833

1.00

38.8

2

1.5

Dir

ect E

xcha

nge

Lin

ess a

dded

ann

ually

[Inc

lude

s Fix

ed+W

LL

+CM

Ps o

f PSU

s & P

vt.]

(�00

0)48

5.30

735.

6098

6.80

1228

.90

1769

.70

2183

.10

2903

.23

3802

.39

4128

.96

5724

.23

1759

5.19

2215

4.74

3180

4.30

4800

2.30

50.9

3

2. N

umbe

r of

Tel

epho

ne M

eter

ed C

all U

nit [

PSU

s� o

nly]

(Cro

re)

2389

.70

3060

.30

4013

.00

4671

.80

5860

.00

7845

.20

9675

.50

1151

1.90

1476

4.50

1627

6.00

1850

1.92

2012

9.21

NA

NA

0.00

3. N

umbe

r of

Inla

nd T

eleg

ram

s Boo

ked

[BSN

L]

(Lak

h)64

0.99

651.

4564

5.84

605.

5557

5.88

569.

7253

8.83

512.

1844

2.33

403.

7334

4.16

229.

5320

8.66

NA

0.00

4. R

even

ue R

s.***

(Cro

re)

3404

.79

3874

.52

4757

.71

6094

.87

7799

.12

9760

.55

1226

6.09

1458

6.90

1774

4.23

1825

6.70

1017

5.49

2238

6.18

NA

NA

0.00

5. E

xpen

ditu

re R

s. **

*(C

rore

)20

77.2

223

91.2

228

19.7

039

68.3

541

33.2

345

68.5

863

81.1

578

42.3

010

098.

1810

935.

4249

09.4

016

074.

01N

AN

A0.

00

6. R

even

ue S

urpl

us o

ver E

xpen

ses R

s. **

*(Crore)

1327.57

1483.30

1938.01

2126.52

3665.89

5191.97

5884.94

6744.60

7646.05

7321.28

5266.09

6312.17

NA

NA

0.00

7. P

erso

nnel

(at t

he e

nd o

f the

yea

r) [

BSN

L+M

TN

L+D

OT

]**

(�00

0)37

4.97

372.

8238

5.00

395.

0641

8.70

421.

0642

8.84

425.

3042

4.01

421.

3642

3.03

416.

6441

4.18

NA

0.00

* -

Reg

iste

red

Dem

and

is s

um o

f DEL

s an

d Te

leph

one

Wai

ting

Lis

t.**

- T

his

incl

udes

indu

stria

l sta

ff o

f Tel

ecom

Fac

torie

s an

d St

ores

.**

* - R

even

ue a

nd E

xpen

ditu

re R

elat

ed p

erfo

rman

ce fo

r 200

0-01

repr

esen

ts o

nly

for (

Oct

.-Mar

ch)

113

Table - 8

Relative performance during March 2002-March 2004

S. Description Position at the End of Absolute Position at the End of AbsoluteNo. Change Change

March’02 March’03 (4-3) March’03 March’04 (7-6)

1 2 3 4 5 6 7 8

1 No.of Telephones (Fixed+WLL) (In Lakh) Public 379.44 406.23 26.79 406.23 408.68 2.45

Private 5.93 13.07 7.14 13.07 95.17 82.10

Total 385.37 419.30 33.93 419.30 503.85 84.55

2 Cellular Subscribers (In Lakh) Public 2.18 25.48 23.30 25.48 56.15 30.67

Private 62.13 101.39 39.26 101.39 205.40 104.01

Total 64.31 126.87 62.56 126.87 261.55 134.68

3 Total Telephones (Fixed + Cellular) 449.68 546.17 96.49 546.17 765.40 219.23

4 Teledensity (Based On Prov. Popln of Mar.’02,03 &04 ) 4.29 5.11 - 5.11 7.02 -

5 Switching Capacity [PSUs+Private] Public 474.25 545.64 71.39 545.64 600.25 54.61

[Fixed+WLL+CMPs’](In Lakh) Private NA NA - NA NA -

Total 474.25 545.64 71.39 545.64 600.25 54.61

6 Waiting List - Fixed Phones [In Lakh] 16.87 18.10 1.23 18.10 17.91 -0.19

7 VPTs [PSUs+Private] Public 468016 504945 36929 504945 509682 4737

Private 846 9342 8496 9342 12665 3323

Total 468862 514287 45425 514287 522347 8060

8 PCOs [PSUs] (In Lakh) 10.65 14.00 3.35 14.00 17.59 3.59

9 OFC Route Kms (inclusive of MTNL for March’04) 326271 402083 75812 402083 445822 43739

10 TAX Lines (In Lakh) 34.27 44.38 10.11 44.38 53.42 9.04

11 Rural DELs Public 9144058 11406935 2262877 11406935 12272117 865182

12 Fault Rate 12.50 10.47 -2.03 10.47 9.43 -1.04

115

ACC Accounts Calling CardADC Access Deficit ChargeADSL Asymmetrical Digital Subscriber LineALTTC Advanced Level Telecom Training CentreAPT Asia Pacific TelecommunicationsATM Asynchronous Transfer ModeBRBRAITT Bharat Ratna Bhim Rao Ambedkar Institute of Telecom TrainingCACT Component Approval Centre for TelecomCAD Computer Aided DesignC-DOT Centre for Development of TelematicsCDMA Code Division Multiple AccessCIDA Canadian International Development AgencyCLIP Callers Line Identification ProtocolCMPs Cellular Mobile PhonesCOMAC Centralised Operaton & Maintenance CentreCSMS Customer Service Management SystemDCC Development Coordination CommitteeDCME Digital Circuit Multiplication EquipmentDECT Digital Enhanced Cordless TelephoneDIAS Direct Internet Access SystemDLC Digital Loop CarrierDWDM Dense Wavelength Division MultiplexingEMTS Express Money Transfer ServiceFAS Fibre Access SystemFDMA Frequency Division Multiple AccessFRS Fault Repair ServiceGMPCS Global Mobile Personal Communication by SatelliteGPSS Gateway Packet Switching SystemGRs Generic RequirementsHECS High Erlang Capacity SwitchHSDL High bit rate Digital SubscriberlineIFRB International Frequency Regulation BoardILD International Long DistanceIMRB Indian Marketing Research BureauIN Intelligent NetworkINSAT Indian National SatelliteIRs Interface RequirementsISDN Integrated Services Digital NetworkISP Internet Service ProviderITU International Telecommunication UnionIUC Interconnection Usage ChargeIVRS Interactive Voice Response SystemLMDS Local Multi-Point Distribution SystemLOI Letter of IntentMCIBS Microprocessor Controlled Intelligent Building SystemsMCPC Multi Channel Per CarrierMLLN Managed Leased Line NetworkMMS Multimedia Messaging ServiceMPLS Multi Protocol Label Switching

Acronyms

116

MSS Mobile Satellite SystemMTL Millennium Telecom LimitedMUX MultiplexerNIB National Internet BackboneNLDS National Long Distance ServiceNTP New Telecom PolicyNYSE New York Stock ExchangeOFC Optical Fiber CableOLTE Optical Line Terminating EquipmentQTS Quality of Telephone ServiceQOS Quality of ServicePCB Printed Circuit BoardPCO Public Call OfficePCS Personal Communication SystemPMRTS Public Mobile Radio Trunk ServicePOI Point of InterconnectionPOT Plain Old TelephonePRS Premium Rate ServicePSTN Public Switching Telecom NetworkRABMN Remote Area Business Message NetworkRAN Radio Access NetworkRTTC Regional Telecom Training CentreSAS System of Accounting SeparationSBM Signal Base ModuleSDCA Short Distance Charging AreaSDH Synchronous Digital HierarchySIM Subscribers Identification ModuleSSA Secondary Switching AreaSTM Synchronous Transport ModuleTCP Transmission Connection ProtocolTDMA Time Division Multiple AccessTDSAT Telecom Dispute Settlement Appellate TribunalTRAI Telecom Regulatory Authority of IndiaTSP Tribal Sub PlanTTL Telecom Testing LaboratoryTTO Telecommunication Tariff OrderUHF Ultra High FrequencyUMS Unified Messaging ServiceUSF Universal Service FundUSO Universal Service ObligationUTL United Telecom LimitedVCC Virtual Calling CordVMS Voice Mail ServiceVPN Virtual Private NetworkVPT Village Public TelephoneVRLA Value Regulated Lead AcidVSAT Very Small Aperture TerminalWLL Wireless in Local LoopWPC Wireless Planning & CoordinationWPHS Web Page Hosting ServiceWSHS Web Server Hosting Service

117

Department of Telecommunications( Organisation Chart )

LEGEND:

TPF: Tariff Public Enterprises Finance PIP: Private Investment Promotion LF: Licensing Finance Estt:Establishment FEB: Finance, Establishment & BudgetVAS: Value Added Services TEC: Telecom Engineering Centre SR: Staff Relations PG: Public Grievances VIG: VigilanceWPF: Wireless Planning Finance BS: Basic Services IR: International Relations PP: Policy Planning DDG : Dy. Director GeneralLR: Licensing Regulations SU: Service Unit T: TelecomA: Administration Prod.: Production

Minister of Communications & Information Technology

Minister of State for Communications & Information Technology

Member (Finance) Member (Production) Member (Technology) Member (Services)

Sr.DDG(Fin.)

Adv.(Prod.) Adv.(T) Wireless Adv.

Adv.(HRD) Adv.(O) Sr.DDGSr.DDG(VAS)

.DDG(PIP)DDG(TPF)

Sr.DDG(TEC)

DDG(IR)

Joint Secretary(T)

DDG(BS)

DDG(LR)

DDG(LF)

DDG(WPF)

DDG A/c DoT

DDG(Estt.)

DDG(SR)

Sr.DDG(PP)

Sr.DDG(SU)

DDG(PG)

DDG(Elect.)

Director(Architect)

DDG (Civil)

Secy(TC) & Addl. Secy.(T)

Joint Secretary(A)

Adv.(Economics)

Secretary DOT &Chairman TC

DDG(FEB)

Legal Adv.