Sinha vs Paswan fight, not quite in the open yet

Though the communication ministry has been claiming that the annual cost of this proposal is minimal, as reported by The Indian Express earlier, the actual cost works out to a one-time cost of Rs 800 crore and a recurring annual loss of Rs 400 crore.

The actual cost of installing a phone connection is around Rs 25,000 — that takes the fixed cost of installing 3.2 lakh connections to Rs 800 crore. The normal earnings from a phone, if supplied to an average user, is Rs 10,000 a year — that’s another Rs 320 crore. Add to this, the cost of the free calls that these employees will get, and that’s another Rs 80 crore.

As against this, when the proposal was put before the Telecom Commission, it said the “total financial implication of the decision to provide rent free phones to the working employee would be a non-recurring expenditure of Rs 24 crore on the waiver of installation charge and a recurring expenditure of Rs 68 crore and Rs 9.9 crore loss of interest on security deposit.”

After a meeting of the National Telecom Advisory Committee, Paswan stuck to his earlier stance that the issue and costs had been blown out of proportion and that the move was to boost the morale of the employees especially in the context of corporatisation of Department of Telecom services in the next six months.

It was argued that free telephone facilities were already being availed of by class I and II employees, was being now extended to class III and IV employees. An agenda paper of the National Telecom Advisory Committee said that MTNL had recently decided to grant service telephone facility to its working employees and the proposed move would provide a parity between MTNL and DTS employees.