BSNL
Signage for Bharat Sanchar Nigam Ltd. (BSNL) is displayed atop the company's head office in Mumbai, India | Dhiraj Singh/Bloomberg
Text Size:
  • 696
    Shares

New Delhi: The employees of government-owned telecom major Bharat Sanchar Nigam Ltd (BSNL) have now started to receive their February salary dues after a delay of a couple of weeks, but issues at the cash-strapped player are far from over.

On Friday, the telecom company released funds to its circle offices for payment of last month’s salary dues to employees at the earliest. The move came after chief executive Anupam Shrivastava promised to clear dues by Friday.

This is the first instance of delayed salaries for BSNL employees.

However, employees fear that salaries for next month too might get delayed, blaming the Modi government for the cash crunch at the company.

BSNL could be staring at a loss of over Rs 8,000 crore in the ongoing 2018-19 fiscal, said company insiders and analysts on condition of anonymity.

For the previous 2017-18 fiscal, it had reported a loss of Rs 7,992 crore. However, in the provisional numbers given by telecom minister Manoj Sinha earlier, the loss was reported at Rs 4,793 crore.

A finance ministry official said that a roadmap for company will be worked out soon. “We will take a final decision on the future of BSNL soon.”

ThePrint reached Shrivastava for comment but there was no response till the time of publishing this report.


Also read: Starting with BSNL & MTNL, India’s new govt must bring bankruptcy process to public sector


‘Problem created by Centre’

“We are not expecting to get timely salaries next month too as there is a dearth of funds. This problem may continue for some time,” P. Abhimanyu, general secretary, BSNL Employees Union, told The Print.

Abhimanyu blamed the Modi government for not clearing dues of over Rs 2,500 crore for its own projects that have been thrust on BSNL.

“The problem has been created purely by the Centre. The entire telecom industry is going through a financial crunch due to entry of Reliance Jio, pushing giants like Airtel and Vodafone into losses. The case is the same with BSNL,” said Abhimanyu.

He added, “Only now the government has released Rs 500 crore out of the total amount pending, which is being spent in clearing salaries.”

However, R.K. Mishra, UP circle secretary of BSNL Employees Union, pointed out that salaries of staff are paid from the company’s internal revenue without any government support.

On Thursday, Shrivastava said Rs 850 crore from internal accruals will be spent on clearing salary dues.

BSNL’s monthly salary expenditure is about Rs 750 crore.

The company, which had a staff of 3.5 lakh in 2000, has been steadily reducing the number of employees. At present, it employs 1.7 lakh people.

Shrivastava has maintained that salaries will come from BSNL’s internal kitty.

The government will try to ensure that there are no further hiccups till the general elections, due in April to May, are over, said an independent analyst who did not wish to be identified.


Also read: Airtel’s Sunil Bharti Mittal says Indian Telecom can recover by 2020


How the problem started

BSNL’s financial health has been in tatters under the Modi government with intense competition from private players, the responsibility of several government projects — including laying of optical fibre-based network for the country’s armed forces — provision of optical submarine cable network, lack of good 4G services, and delayed decision-making process, among others.

In 2014-15, BSNL posted a loss of Rs 8,234 crore. In the next 2015-16 fiscal, the company managed to improve its health by pruning the losses to Rs 4,859 crore. Subsequently, in 2016-17 and 2017-18, it posted losses of Rs 4,786 crore and Rs 7,992 crore, respectively.

While the company managed to reduce its total expenditure, its gross revenue has also been falling — from over Rs 32,400 crore in 2015-16, it fell to Rs 31,533 crore in 2016-17 and further to Rs 27,818 crore (provisional) in 2017-18.

BSNL’s market share has also shrunk from about 19 per cent in 2009 to just 10 per cent at present.

“While the entry of Reliance Jio has created a disruption, the problem for BSNL had started much earlier and it had started losing market share even before Jio,” said the independent analyst.


Also read: Reliance Jio faces Rs 15,000 crore loss over its handset subsidies


Way forward

The telecom company, meanwhile, is actively also looking at offering a voluntary retirement scheme (VRS) to shed about 35,000 employees before going in for a strategic sale or disinvestment.

BSNL has also sought government approval to be able to monetise its huge expanse of land under its land management policy.

According to trade unions, the company could easily earn an income of about Rs 8,000-10,000 crore annually by leasing its land.


Also read: Why India must worry about splitting the internet. Ask the Chinese


 

Get the PrintEssential to make sense of the day's key developments.


  • 696
    Shares
3 Comments Share Your Views

3 COMMENTS

  1. 1. It is easy, and politically convenient right now for some, to blame the NDA government and PM Narendra Modi for poor financial health of two public sector telecom companies, Bharat Sanchar Nigam Ltd (BSNL) & Mahanagar Telephone Nigam Ltd (MTNL). Fact is that since these two companies did make no efforts to introduce new technology, both of them have rapidly lost market share and they are no longer in a position to earn a profit. 2. As it happens in case of other public sector undertakings, burden of excess staff, increased salary unrelated to productivity and burden of ever-rising pensions–these are three factors which have multiplied problems of BSNL & MTNL. Both of them are in sort of a financial crisis as their main business (wired landline phones) is under a serious ‘existential’ threat. Thousands of BSNL & MTNL customers have surrendered and still are surrendering their landline phones. 3. Hence the Union Telecom ministry cannot delay a decision regarding future of these two companies. It is a historical fact that when telecom services business was opened to private sector, both BSNL & MTNL were simply not prepared to face competition from private sector telecomm companies. It is also a fact that these two companies did not get support from the concerned ministry. The then Communications minister in Union cabinet favoured private companies who grew at cost of both BSNL & MTNL. Hence question that remains to be answered is this: would Voluntary Retirement Scheme be good enough to turn around BSNL & MTNL? Answer is in the negative but our politicians have rarely shown political will and administrative courage to deal with losses of public sector undertakings and we cannot expect much from them. BSNL & MTNL like Air India, another public sector undertaking in loss, will continue to be in business but at cost of taxpayers’ money.

LEAVE A REPLY

Please enter your comment!
Please enter your name here