BSNL Fund Raising Plan By Asset Selling Might be a Step Back: Opinion

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BSNL Fund Raising Plan

Bharat Sanchar Nigam Limited (BSNL) is the only telecom operator after Vodafone Idea, which has found itself among the financial crunch. However, things for BSNL seem to be a little different, with the shadow of central government looming over itself. This complicates things about BSNL regarding its competency in the industry and even its survival. Looking at the centre’s moods, we can definitely say that the public telecom company is here to stay as it falls under a “strategic” sector for the government. Not only this, but the centre has already shown its intention of keeping a four-player industry with one public telco in the scene. However, the recent plans of monetising BSNL assets have not been met with delight by various trade unions.

Unions Against Selling to Private Buyers

On Monday, the All Unions and Associations of Bharat Sanchar Nigam Ltd (AUAB) opposed the Government’s plans to raise Rs 40,000 crore by monetising BSNL’s towers and optical fibre and a proposal to restructure manpower. There are some fine lines that should be tread on for the wellbeing of the public telecom company. Usually, the trade unions have a rigid stance against any kind of privatisation and take a position of strict government control, but for entirely different reasons, BSNL should likely look into other options of raising money for its own good.

Looking at the previous month results of BSNL, wherein it added 1.1 lakh new BSNL FTTH subscribers, it is clear that the public telecom company is killing it in at least one arena and that is wired broadband. Even though BSNL owns the spectrum and a chunk of requisite equipment, it has not been able to roll out the 4G services. In such a situation, where BSNL 4G is a few years away, and BSNL wired broadband seems to be gaining traction, cutting even a fraction of capacity by putting it on the lot for private players is a step back.

Administrative Inefficiencies

BSNL’s approach of relying on Indian Telecom Service officers has also been questioned a lot in recent times, and the recent push of lateral entry by the government should be well thought of in the case of the public telco as well. While at the time, employees were being given VRS and BSNL was on the rally to cut redundancy in the workforce, a lot of Principal General Managers and General Managers (GMs) posted on deputation with the company were incurring Rs 90-100 crore per year as salary. If the internal discrepancies are minimised, then possibly these resources can be put to better use on the back of good efficiency.

Right now, the widespread network of BSNL remains its strongest point. Cutting that off in favour of raising money might prove to be detrimental for the extensive FTTH spread, which might put BSNL on the map again. Instead, the focus of BSNL should on fixing administrative inefficiencies, slightly raising tariffs on the back of floor pricing, which seems to be imminent in the near future and expanding its wired broadband service.

Reported By

Junior Editor

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

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