The comptroller and auditor general (CAG) has flagged serious lapses in the functioning of the ministry of communications and the ministry of electronics and information technology (Meity). CAG says, that due to delays in revenue assessments, the department of telecommunications (DoT) failed to recover Rs2,463.67 crore from telecom service-providers.

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CAG audit report, tabled in Parliament on Tuesday, highlighted several irregularities in telecom revenue-sharing and incentives for electronics manufacturing. In one case, it says due to lack of due diligence, non-billing and deficient planning, State-run Bharat Sanchar Nigam Ltd (BSNL) lost Rs1,757.76 crore and penal interest between May 2014 and March 2024.
"BSNL failed to enforce master service agreement (MSA) with Reliance Jio Infocomm Ltd (RJIL) and did not bill it for the additional technology used on BSNL's shared passive infrastructure, resulting in loss of Rs1,757.76 crore and penal interest thereon, between May 2014 to March 2024 to the government exchequer," CAG says.
In May 2014, BSNL entered into an MSA with Reliance Jio Infocomm to share the State-run telco's passive infrastructure located in different parts of the country for 15 years. As per schedule 1 of MSA, six standard antennae along with six remote radio heads (RRH) could be mounted on a ground base tower (GBT) and rooftop tower (RTT) and one base transceiver station (BTS) slot was provided for it.
In January 2019, BSNL's corporate office clarified that frequency division duplexing (FDD) and time division duplex (TDD) were two different technologies and any additional implementation of either of them was to be treated as new technology and charges were to be levied as per clause 1.6 (ii) schedule 3 of MSA (70% additional charges). BSNL also conveyed this to Reliance Jio Infocomm in February 2019 for compliance.
Based on this clarification, four circles of BSNL raised invoices between March and August 2019, adding 70% additional charges. However, after August 2019, these circles stopped billing Reliance Jio Infocomm for the additional charges at the instructions of BSNL's corporate office. Reliance Jio Infocomm, however, refused to pay the bills between April and September 2019, stating that FDD or TDD were two standards and alternative transmission modes of duplexing within the same technology, namely long-term evolution (LTE) or 4G.
"Additionally, BSNL's corporate office did not exercise the available arbitration option as per the MSA for recovery or negotiating its legitimate dues. It is also noteworthy that the committee formed in August 2020 took more than three years to finalise its recommendations in October 2023 and Reliance Jio Infocomm has yet not accepted the composite rates too. Four circles out of 23 circles of BSNL raised bills at the rate recommended by the committee, which were rejected by Reliance Jio Infocomm. Thus, non-enforcement of tariff clause in the MSA with Reliance Jio Infocomm resulted in non-billing and hence loss of revenue of Rs1,757.76 crore to BSNL between May 2014 to March 2024," CAG says.
The auditor observed that BSNL had not applied annual escalation charges towards infrastructure sharing while billing Reliance Jio Infocomm from 2015-16 to 2023-24. On being pointed out by CAG, BSNL raised invoices for the short-billed amount and recovered Rs15.87 crore in five circles.
Further, the report highlighted deficient planning by BSNL and deviation from the provisions of its own procurement manual, resulted in injudicious procurement of higher size polyethylene insulated jelly filled (PIJF) underground cables, out of which cables valued at Rs80.64 crore remained unutilised, rendering the expenditure infructuous.
"BSNL, in 22 circles out of 28 circles, did not deduct the share of license fee from the revenue share paid to the telecom infrastructure providers (TIPs) as per the conditions laid down in the agreement, resulting in a loss of Rs38.36 crore for the period 2019-20 to 2021-22," CAG says.
As of March 2023, the Union government's investment in BSNL was Rs38,886.44 crore. The total revenues and losses incurred by BSNL during FY22-23 were Rs20,698.90 crore and Rs6,662.20 crore, respectively.
"The main reason for the decrease in losses during FY22-23 is due to a reduction in employee benefit expenses and an increase in cellular income. During the past five years, BSNL's revenues from operations grew from Rs17,761 crore in FY18-19 to Rs19,128 crore in FY22-23, registering a growth rate of 7.7% due to the implementation of a revival package of Rs3.2 lakh crore by the (Union) government," CAG says.