BSNL’s Failure to Bill Reliance Jio for Infrastructure Sharing Costs Government ₹1,757 Crore: CAG

The Comptroller and Auditor General of India (CAG) has highlighted a major financial lapse by Bharat Sanchar Nigam Limited (BSNL), which resulted in a loss of ₹1,757.76 crore to the government exchequer. The report reveals that BSNL failed to enforce the Master Service Agreement (MSA) with Reliance Jio Infocomm Ltd (RJIL) and did not bill the telecom giant for the additional technology usage on BSNL’s shared passive infrastructure. This lapse, which occurred between May 2014 and March 2024, not only caused a significant revenue loss but also attracted penal interest due to the non-recovery of dues.

Background of the Issue

BSNL, a state-owned telecommunications company, had an agreement with Reliance Jio for sharing its passive infrastructure, which includes telecom towers, optical fiber networks, and other essential infrastructure used for mobile and broadband services. Under the Master Service Agreement (MSA), Reliance Jio was required to pay BSNL for using these assets. However, the CAG report reveals that BSNL did not properly enforce the agreement and failed to bill Reliance Jio for additional technology usage, leading to mounting unpaid dues.

Extent of Financial Loss

The ₹1,757.76 crore loss to the government exchequer represents the unpaid dues that BSNL failed to collect from Reliance Jio over a decade. This includes charges for additional technology usage that was never billed, as well as penal interest on the outstanding amount. The failure to issue proper invoices and track payments has raised serious concerns about BSNL’s financial management and accountability in dealing with private telecom operators.

Implications for BSNL and the Telecom Sector

This financial lapse further weakens BSNL, which has already been struggling with financial distress and declining market share in India’s highly competitive telecom sector. As a government-owned entity, BSNL plays a crucial role in providing affordable telecom services and ensuring connectivity in rural and remote areas. The loss of such a huge amount negatively impacts the company's operational efficiency, network expansion, and overall financial sustainability.

Moreover, the issue raises questions about the governance and oversight mechanisms within BSNL. The failure to enforce contractual agreements with private players like Reliance Jio sets a problematic precedent and highlights the need for stronger financial controls, regular audits, and stricter compliance mechanisms to prevent such revenue leakages in the future.

Government’s Response and Future Actions

Following the CAG’s findings, it is expected that BSNL will be directed to recover the outstanding dues from Reliance Jio and implement corrective measures to prevent similar lapses. The report may also prompt the Department of Telecommunications (DoT) to strengthen monitoring and oversight of state-owned telecom companies to ensure that agreements with private firms are enforced effectively.

Conclusion

The ₹1,757.76 crore loss due to BSNL’s failure to enforce its agreement with Reliance Jio highlights a critical financial mismanagement issue within the state-owned telecom operator. Moving forward, BSNL must improve its billing and contract enforcement mechanisms to avoid revenue losses and ensure financial stability. The government and regulatory authorities must also take strict action to hold responsible officials accountable and strengthen governance within the public sector telecom industry.