BSNL Challenges CAG Revenue Loss Claims

State-owned BSNL is gearing up to present a detailed counter against the Department of Expenditure (DoE), challenging the Comptroller and Auditor General’s (CAG) assertion that BSNL incurred a revenue loss of ₹1,757.76 crore due to the non-billing of Reliance Jio Infocomm Limited (RJIL) for shared telecom infrastructure, as stated in a report by ET Telecom.

BSNL’s Position on Alleged Losses

In its upcoming response, BSNL contends that the claimed loss has been “incorrectly exaggerated” owing to misrepresentation and improper interpretation of clauses concerning additional components within its Master Service Agreement (MSA) with Jio. As per the ET Telecom report, the operator asserts that there was no real revenue loss, and the figure mentioned by the CAG does not accurately reflect the mutual nature of the infrastructure-sharing agreement.

Challenging the CAG’s Assertions

The CAG’s audit report alleged that BSNL did not enforce critical clauses of the MSA from May 2014 through March 2024, particularly regarding the additional technologies that Jio implemented using BSNL’s passive infrastructure. The auditor suggested that this lack of enforcement resulted in an estimated notional loss of ₹1,757.76 crore, along with applicable penal interest, and highlighted a failure to implement escalation clauses, which could lead to an additional ₹29 crore loss, including GST.

Nonetheless, BSNL maintains that it had issued invoices amounting to ₹108 crore to Jio and is actively seeking further payments beyond the standard rental fees. The operator further claims that pricing for additional hardware, power, and the deployment of both TDD and FDD 4G technologies was agreed upon in April 2018.

To formalise this transaction, an addendum to the MSA was signed on 31 January 2025, detailing the charges applicable for expanded 4G utilisation. BSNL asserts that this addendum complies with the government’s overarching policy that promotes infrastructure sharing among telecom operators to minimise capital and operational costs.

Understanding the Reciprocal Agreement

Sources cited by ET Telecom suggest that the CAG might have neglected the reciprocal aspect of BSNL’s arrangement with Reliance Jio. Under this framework, infrastructure sharing is not a one-way service; both parties mutually established the terms, especially regarding additional technology requirements that exceed the standard setup.

BSNL has historically collaborated with various private sector entities—Reliance Jio, Bharti Airtel, and Vodafone Idea—to monetise its tower assets. In 2014, the operator formally entered into infrastructure sharing agreements with these entities to enhance resource efficiency.

Details from Previous Agreements

Former Communications Minister Ravi Shankar Prasad, who addressed the Rajya Sabha in February 2020, confirmed that out of 13,146 BSNL mobile towers, 8,363 were shared with Jio, 2,779 with Bharti Airtel, and 1,782 with Vodafone Idea. He indicated that no fixed payments were made from BSNL to Jio under this arrangement.

Payment records further reveal that Reliance Jio has made substantial annual contributions to BSNL: ₹171.81 crore in 2016–17, ₹472.80 crore in 2017–18, ₹678.38 crore in 2018–19, and ₹402.28 crore for the initial three quarters of 2019–20.

BSNL is anticipated to submit its extensive response to the Department of Expenditure later this month, following the completion of all internal approvals. The state-owned telecommunications company asserts that it has adhered to all contractual obligations, and the CAG’s findings do not accurately represent the operational and financial realities of the agreement.