Shrinking Public Sector

BSNL is The Victim of Modi Govt Policies

B Sivaraman

Bizarre are the ways in which Modi Government has been handling the public sector telecom behemoth BSNL. Though 4G was launched by Airtel in India as far back as April 2012, and by Reliance Jio and all other private telecom majors subsequently, the government adamantly denied 4G to its own BSNL. BSNL is still operating with dated 2G and 3G tech but is still remarkably able to withstand competition from Reliance Jio and Airtel.

Only after the employees' unions went on a 3-day strike in 2018 and threatened an indefinite strike over deliberate denial of 4G spectrum to BSNL to favour the private telecom corporates, the government agreed in principle to sanction 4G spectrum to BSNL. Only at the fag end of its term, the Modi Government started BSNL 4g service in piecemeal.

But Mr Modi threw a stunning surprise. In 2018 end itself, his government pushed BSNL to launch 5G. Under direction from telecom ministry, BSNL has entered into deals with two American companies Coriant and Ciena, to conduct field trials in India on 5G. They are the same companies supplying technology to the American telecom giant AT&T, and Mr Gundanna, Circle Secretary of BSNL Employees Union, Karnataka Circle, confirms that the field trials are actually for AT&T. Not only AT&T, the BSNL has reportedly entered into formal deals with Samsung, Nokia, Cisco, Vodafone, and the Japanese NTT Docomo,and field trials would be on for a year. The Japanese Soft Bank has reportedly agreed to finance the launch of 5G in India. To begin with, Modi Government was planning for a 5G Corridor in New Delhi.

The government refused to allow BSNL to launch 4G for 7 years under the pretext that it would require around Rs.25,000 crore investment to begin with for developing 4G infrastructure and acquiring 4G technology, and its revenue position and accumulated losses wouldn't be able to sustain that level of investment. BSNL officials requested bank guarantees from Department of Telecom (DoT) so that they could borrow the needed money from the banks which were willing to bankroll BSNL's launch of 4G, and the government even refused that.

But 5G is a different proposition. TRAI Chairman RS Sharma stated in January 2019 that India would require $100 billion for the 5G rollout over 5-7 years. How would the Modi government, which was not forthcoming to give even bank guarantees to the tune of Rs.25,000 crore to BSNL, manage this much money? Is the launch of 5G for real or is it some kind of tele-'con'jumla by Modi and Co.?

Well, this could be partly a jumla but partly real as well. This is because simultaneously BSNL has also entered into long-term strategic agreements with three companies from the Tata Group.

Tata Motors would make all its cars henceforth as "smart cars" using BSNL 5G, to be launched coming year coinciding with 5G's global launch. The satellite GPS-linked cars can be tracked for their location and even guided remotely and can remain connected online for a range of things from Google map to music to news to TV film channels and entertainment.

Similar is the case with TataSky. This internet service provider is scheduled to launch a DTH service for live streaming of films including new films, and hopes to become a Netflix of India and this unhindered quality live-streaming is possible only with 5G, and BSNL would render this service to TataSky with its own investment for 5G.

Tata Teleservices is hoping to launch its own 5G telephony and for this mobile phone service it would not invest in its own infrastructure. A 15-year deal has been struck between Tata Teleservices and BSNL for the former to use its towers. BSNL's 77,000 mobile towers would be put at the disposal of Tatas for this. The government is also toying with the idea of hiving off the towers segment of the BSNL into a separate company and privatising it.

'No 4G but rush into 5G!'-the rationale behind this puzzling bizarre logic of the Modi Government would unravel if we look at it in the context of growing stranglehold of Tatas over BSNL. As per speculation in the media grapevine, Tatas' collaboration with BSNL on 5G also figured in Ratan Tatas' two meetings with RSS boss Mohan Bhagwat.

The BSNL is also currently launching a VRS scheme to downsize staff strength by 30%. As the terms of the VRS are very paltry, there are not many takers for it among employees. A section of officers close to the ruling establishment is trying to create a scare that this is the last opportunity and in future if BSNL is pushed into bankruptcy they wouldn't get even this. They are even offering to slightly improve the VRS benefits to overcome the lukewarm response among the employees. But Mr M. Kanniappan, Chennai Circle Secretary of BSNL Employees' Union says, "We are opposing VRS itself in to and not just its paltry terms. We would not allow that as it is a conspiracy to privatise BSNL on more favourable terms to corporates". He doesn't rule out BSNL getting divided into parts and being handed over to Tatas or other private corporates.

Not only Tatas, Reliance Jio is also grabbing BSNL infra and subscribers wholesale. A government committee has recommended 5G spectrum to Reliance Jio, Airtel and Vodafone too. Now that Tatas have amicably settled their Docomo dispute with their estranged Japanese partners NTT Docomo, they might now enter the race with renewed international backing. But there is a catch. Despite huge investments, the price war launched by Mukesh Ambani has sapped the revenues, and even before that the 4G auction was not as dramatic as the 2G and 3G ones and Mr Modi's fiscal calculations based on high auction revenues were upset asper his own admission. Would 5G investments be as remunerative as earlier 4G or 3G? Worse, if Tatas and Ambanis join a new price war and Huawei also enters the scene, would India become the Kurukshetra for the ultimate telecom corporate wars?

"Let corporates fight each other but we would not allow the BSNL to privatise. We have been opposing privatisation for the last 2 decades and more, and we would fight government's privatisation tooth and nail no matter which government comes to office", says Mr Kanniappan. Judging by the mood of the BSNL workers, this would be a bigger Mahabharat indeed!

Vol. 51, No. 52, Jun 30 - Jul 6, 2019