PCOs book Rs 500 cr private call

Bharat Sanchar Nigam Ltd is losing over Rs 500 crore (Rs 5 billion) in commission every year due to owners of public call offices using PCOs for personal business.

Consider this: During the last year, BSNL had shelled out a total of Rs 1,800 crore (Rs 18 billion) in commission. PCO owners get 20 to 35 per cent of their revenue on a graded basis as commission.

BSNL sources estimate that nearly a third of its 2.1 million PCO owners in the country misuse this service for mostly making personal and business related calls of their own, rather than providing this facility to customers. This translated into losses of over Rs 500 crore (Rs 5 billion) annually, the sources said.

This happens because many public phone booth owners, especially those in towns and metros, do not run a full-fledged PCO business from a dedicated booth. Instead, they offered this service from commercial establishments such as hotels and shops, BSNL sources said.

Besides, with falling revenue from the PCO business on account of the mobile boom, many operators have shifted to other commercial activities in the same premises but continue to retain their telephone connections under a PCO licence. This helped them save between 25 and 30 per cent of their telephone bills, sources added.

BSNL has also estimated that violations are more with regard to local calls, compared with national long-distance calls. PCOs charge between Re 1 and Rs 1.20 per pulse for a local call and receive a flat commission of 30 paise per pulse.

Worse, BSNL does not also have a proper mechanism in place to prevent misuse. "It is not possible to monitor if phones are used by genuine customers or not," BSNL sources said.

Increasing the number of PCOs all over the country is one of the objectives of the communications ministry. BSNL, therefore, cannot deny this service to applicants.

A service provider is required to provide a PCO telephone line within seven days of receiving an application, wherever possible.