The real truth behind the dying BSNL

Sankar Ray

The Bharat Sanchar Limited (BSNL), a central public sector undertaking, is amidst its darkest existentialist crisis. Its staff had been without salary for over eight months. Dozens of offices -each a palatial structure, look like a haunted house. Area offices are scenes of continuous dharna of staff (including contract workers) who have been without salary for nine months. As a result, customer services have screeched to a halt. Over 25000 lines under the Calcutta Telephones are dead, remaining unattended as never before.

Union minister of state for telecom Sanjay Dhotre has assured that efforts are afoot to revive the CPSU, admitting that it has been providing 2G, 3G and 4G (at few locations) mobile services in its Licensed Service Areas (LSAs). But vested interests –both inside and outside the ruling National Democratic Alliance, led by the Bharatiya Janata Party – are covertly at work to sabotage the move. The hidden reason is the hugely lucrative real estate owned by the BSNL.  It has been sitting on a land bank whose current market price is much above Rs 3,00,000 crore. Some financial analysts, committed to professionalism, are in doubts as to whether the present government is really interested in reviving BSNL and Mahanagar Telephone Nigam Ltd (MTNL). More than half a dozen of major airports has been handed over to a Gujarat-based crony capitalist group, close to the Prime Minister Narendra Modi and minister for home affairs Amit Shah, BJP president too – both Gujaratis. The powers-that-be are whole-heartedly committed to decimate the public sector in the interests of select crony capitalist groups.

 Queerly enough, Shah heads a ministerial committee whose first financial agenda is a Rs 6,365 crore voluntary separation package for BSNL employees as also a Rs 1120 crore package for MTNL staffers. Isn’t assurance by the MoS (telecom) to revive the ailing CPSU and unseemly eagerness on the part of MfHA at cross purposes? Anyone who recently visited any BSNL office in any metro cities found one in a haunted house. Over the last decade and a half, almost 80 per cent of employees who retired were not replaced. Even contract employees were released in thousands during the last five years. Is there a pressing need for a voluntary separation, when the financial health of the government is far from being pink? Senior BSNL officials smell a rat. Some crony capitalist biggies are at the doorstep to acquire BSNL for a song.

A tendentious campaign about the financial health is on through mainstream media. Kotak Institutional Equities in an exercise stated that BSNL’s accumulated operating losses crossed Rs 90,000 crore, suggesting the Union government to shut it down. The brokerage in a note says, “BSNL’s financial position has been deteriorating for a long time, in that, the company in the past 14 years has moved from `Navratna’ status to being declared an incipient sick PSU.” 

Let it be noted that the sickness of BSNL is considerably exaggerated. It’s accumulated loss until 2017-18 was Rs 57,878 crore. The break-up is as follows: Rs 1,823 crore in 2009 – 2010, Rs 6,384 crore in 2010-11, Rs 8, 851 crores in 2011-12, Rs 7,884 crore in 2012-13, Rs 7,085 crore in 2013-14, Rs 8,234 crore in 2014-15, Rs 4,859 crore in 2015-16, Rs 4,786 crore in 2016-17 and Rs 7,992 crore in 2017-18.  Before that BSNL earned profit every year. Between 2000-2001 and 2008-09, BSNL reaped an aggregate profit of Rs 44,790 crore. The break-up is Rs 747 crore in 2000-2001 (1 Oct 2000 to 31Mar 2001), Rs 6,312 crore in 2001-2002, Rs 1,444 crore in 2002-2003, Rs 5,976 crore in 2003-2004, Rs10,183 crore in 2004-2005, Rs 8,939 crore, Rs 7,805 crore in 2005-2006, Rs 3,009 crore in 2007-2008 and Rs 575 crore in 2008-2009.

It’s evident that the CPSU slipped into the red in 2009-2010 during the regime of Congress-led United Progressive Alliance but the NDA government with Ravi Shankar Prasad as the minister of telecommunications showed no concern to bring it back into the path of economic viability.

If the long pending dues that the finance ministry owes to the BSNL have been paid to the company, its accumulated loss would have been less than Rs 4000 crore. Let me jot them down: excess pension contributions - Rs 2500 crore, reserve fund- Rs. 30000 crores usurped under different sources, repayment of national loan- Rs. 14000 crores, payment of Rs 2500 crore against work done under government projects, payment of DoT and Term Cell employees- Rs. 500 crore, and excess income tax collected- Rs.5000 crore.

If during the UPA government in the second tenure (when the DoT minister was Beni Prasad Verma of Samajwadi Party and finance minister was Pranab Mukherjee) BSNL was prevented from expansion, while the present government deprived it of 4G Spectrum that was allotted to private operators.

Over 50,000 employees will reach superannuation in three years and that will drastically reduce the employee wages load. If 4G Spectrum is allotted to BSNL, revenues will bounce back and accrual of revenues from mobile is set to be high (as only BSNL owns a network, others being leased-in from BSNL). The administrative cost for the allocation of 4G radio waves to BSNL is estimated at Rs 14,000 crore. For this, no additional budgetary allocation is necessary as dues to the BSNL is over Rs 54,000 crore. Furthermore, the fastest growing one is Fibre to Home (FTTH) live services, one of the most potentially high additional revenue-generation routes for the future.

Lastly, it is not that only BSNL is in the red in the Indian telecom industry. The total loss, incurred by private operators, Airtel, Voda Idea and Jio crossed Rs 400,000 crore and none is in deficit of less than Rs 100,000 crore. Why then singling out BSNL which provides the cheapest tariff for mobile and broadband users with various pocket friendly plans? It has been the lone operator that works during catastrophes and the only mobile operator connects the nation during Amarnath Yatra.

The following is a note from a former general manager of BSNL that vouchsafes our database.


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Aug 31, 2019

Sankar Ray [email protected]

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