Bharat Sanchar Nigam Limited , formed in the year 2000 from its parent Department of Telecommunications(DOT) to give level playing field to private telecom operators. Initially BSNL was allowed to work in wired line communication only, while private players were working in mobile communication. But the very motive of Government to make communications services available to every citizen was not being taken care by private operators .Private operators were spread there in all major cities and places where high revenue generation was there leaving remote and rural areas . In 2005 BSNL launched mobile services to fulfill to motive of government to make mobile services accessible to every citizen ,with special focus on rural services. BSNL opened rural exchanges as well as installed mobile towers in rural areas.
Whats Wrong In Opening new exchanges and Mobile Towers
While BSNL earn huge revenue from opening new exchanges and Mobile towers because of high tariffs in landline as well as in mobile in early days, but substandard work in cable laying (no proper depth) caused increased maintenance cost of its Landline services due to frequent damages in development work of water and road.slowly tariffs were reduced in mobile , followed by Landline thus reducing its revenue . When private operators strengthen their network in cities , BSNL failed to upgrade network due to dependence on DOT and Communication ministry .While BSNL is having good number of rural towers , in cities it is far behind private operators.
Why BSNL is a failure in spite of huge resources?
Although BSNL has played very important role to fulfill social obligation of Indian Government, but it has failed to grab the business opportunities in spite of huge infrastructure and resources. When we talk about BSNL it is not like any other PSU or private company. BSNL is formed from DOT to give level playing field to other operators but with dependence on DOT and Communication ministry for any important decision. While BSNL was not allowed to expand and modernise its network on the pretext of national security , burden on exchequer etc. private operators took a lead with timely upgrading their networks. This not only caused decline in market share of BSNL but also poor image among customers.
What are the structural weakness in the BSNL?
In the 2014 when new Government elected and Shri Rvishankar Prasad was given portfolio of Telecom minister he was very keen to appoint a competent CMD from open market to lead the PSU to new high, but no business leader was ready to take the charge due to complex structure of the PSU.What were these complexities lets have a look:
1. At all major decision making positions officers working were ITS recruited by DOT which were not absorbed in BSNL, their future is secured by DOT and totally independent of the fate of BSNL.
2. Most of the employees were recruited to work in legacy network of Landline and to upgrade skills of these employees was not easy.
3. No specialized recruitment by the PSU for specific roles. Most of the new recruitment were through common entrance at post of JTO at Junior management level, & JAO in finance stream.
4. Job description at any post is not specified.
5. No role of employees working in fields in any decision making in the company.
6. No proper career progression to qualified and talented young workforce.
7. Huge corruption at various levels in procurement of equipment and tenders ultimately affecting quality of network.
8. Limitation of fulfilling social obligation on behalf of Government of India in rural and non-profitable areas.
9. Huge liability of retired employees towards Medical benefits.
These were the obvious reasons that Government could not bring any professional leader from private sector to lead BSNL.
Growth of BSNL after 2014 and decline
After finding no contender finally one more ITS officer was assigned the Job of leading the company Shri Anupam Shrivastav, working then at the post of Director CM. Being very dynamic leader Anupam Shrivastav brought new Zeal in the organisation with taking various initiatives to upgrade BSNL network and providing competitive tariffs at par with the private operators. BSNL came to operational profit in the year 2015 with operational profit of 672 crores and next financial year of 2016 it booked operational profit of 3855 Rs . But BSNL could no longer continue increasing its revenue due to launch of RJIO in 2016 and free services it offered for six months.
Predatory pricing by RJIO not only affected revenue of BSNL but all the private operators causing shut down of number of Telecom operators namely AIRCEL,UNINOR, TATA TELESERVICES, RELIANCE etc. VODAFONE IDEA merged their business to mange their losses. AIRTEL and VODAFONE-IDEA finally managed to increase their revenue with launch of 4G services and taking fixed monthly charges for their services. BSNL is still waiting for 4G spectrum since 2016 . BSNL upgraded its network to launch nationwide 4G but spectrum was the only roadblock , to test its 4G services BSNL has shut down its 3G services in many Cities across India but it is not widely available.
BSNL has requested Government to provide 4G spectrum by equity infusion and payment from its own resources. But this request is still not entertained by Government of India which is still looking at various aspects of providing 4G spectrum to BSNL.
Recently CMD, MTNL, Shri P. K. Purwar (ITS) has been appointed as CMD BSNL for 5 years , with the very motive of merging these two companies , as per the intention of Government.
What is the future of BSNL?
This is the biggest question what everybody asking including 175000 employees of BSNL. As per the agreement between Government and Unions and associations of BSNL at the time of formation of BSNL , Government of India has committed to take care of financial viability of the organisation. Telecom minister has also issued statement in the parliament in his second term that BSNL is strategic PSU and responsibility of Government.
Government is looking for various proposals submitted by DOT , there are two main proposals:
1. Funding by Government for VRS to nearly 54000 employees and 4G spectrum by issuing sovereign bonds against Land parcels of BSNL
2. Reduction in the retirement age from 60 years to 58 years.
While Unions and Associations of BSNL has openly opposed VRS , and age reduction Gvernment is looking determined to take some positive steps ,altough there are hurdles in reducing retirement age from 60 yrs to 58 for a sindle PSU.
While one option is there which Government may consider is compulsary retirement to inefficient staff working in BSNL and MTNL both. As per the Memorandom issued by DoPT on June 20, 2019 , all central Government and PSU's has to review performance of employees above 55 years of age on monthly basis and compulsory retire the non performers. Reviewing performance after age of 55 is regular practice in most of the PSU's and Government departments, but not taken seriously. Recently Government has given compulsary retirement to commisioner level officers in income tax department. By this Government has given clear message perform or perish.
But is it possible to reduce staff in BSNL by Giving compulsory retirement to non performers.It may be but reducing staff only will not solve the problem of BSNL.
What are the challenges after reducing staff expenditure?
It is true that nearly 75 % revenue of BSNL is going in staff salary.But reducing staff only can't bring these companies in profit , as revenue of both the companies is falling considerably year on year. The main reason is lack of vision and business planning, poor services , delay in network upgradation, lack of investment at right place.
BSNL was planning FTTH in 2008-09 but with the auction of 3G spectrum in 2010 focus of BSNL shifted to 3G it could not expand its footprint in FTTH beyond few cities.On the other hand it could not utilise its all India 3G spectrum due delay in nationwide 3G launch. Again while JIO is ready to enter in FTTH services ,BSNL could not capture market in spite of huge resources due to non availability of investment capital and roadmap due to uncertainty about intent of its parent organisation DOT and Government of India.
Although BSNL its pushing aggressively its FTTH service ,it lacks the speed of execution due to financial crisis at the moment. Due to decline of revenue , no loans from banks and no financial support from Government operations and project has severely affected. BSNL has not paid its vendors, contract labours and its field staff for maintenance since last six months. Most of the employees has low morale due to negative media news and uncertainty of future of the organisation.
While Government is only focusing on reducing staff expenditure , there must clear roadmap that how the services will be maintained after reducing 70 % staff of these companies. BSNL is providing landline, broadband and leased line services even at remote areas. While BSNL is looking partnering with vendor for providing FTTH and Broadband services on revenue sharing basis , it is really challenging to find one for rural services.
The image of BSNL and MTNL is deteriorating due to non payment to vendors ,with every passing day chances very bleak that new vendors will work with these companies. So running these companies after reducing staff will itself a challenge.
"As far as the future of BSNL is concern, it will be clear only after implementation of revival plan of Government and roadmap of company by DOT and BSNL management. "
What is at Stake?
Although common man is least bothered about the future of these two public sector PSU's. These two organisation are very much required for national security, and having a control of Government on telecom market and to deal with any emergency situation in case of natural calamity or disaster.
If revival of BSNL fails , future of the employees recruited after year 2000 will be at stake, because employees recruited prior to year 2000 are very much secured with pension benefits.
As Indian telecom market is facing cut throat competition and already under heavy debt . If stress on the sector not released operators will be bound to raise tariffs in such case all the burden will directly transfer to the customers . In the absence of Government PSU customers will be left with no option but to fall prey to high tariffs of private operators.
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