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Telecom travails

It is not an easy decision and the search for answers through committees of ministers and secretaries is quite understandable.

Editorial | New Delhi |

Until a few years ago, the state-owned Bharat Sanchar Nigam Limited ruled the telecommunications roost, especially with users outside metropolitan areas. In small towns, and even villages, BSNL’s coverage ensured connectivity for phone users in areas where private sector operators hadn’t reached. Frequent travellers on major trunk and mail train routes testified that a BSNL mobile connection never let them down, whilst private service providers struggled to offer even spotty coverage.

To this day, users of BSNL’s (and MTNL’s) broadband services swear on the quality of service when it works; of course, the challenge arises when there is even the smallest glitch and customers encounter the company’s disinterested fault-repair apparatus. From the position of strength it was in a decade ago, for BSNL to have reached a state where the Prime Minister’s Office is forced to seek clarity from a high-level panel examining ways to revive the two state-owned giants is shameful indeed.

As is the case with most public sector corporations working in competitive environments, the downfall of BSNL (and MTNL) can in the main be blamed on two factors ~ first, the overarching control of bureaucrats who wield power with little accountability and circumscribe the decision-making powers of professionals, and second, the indolent, often slothful work culture of employees who sometimes even lack the ability to answer a customer’s telephone call with a degree of courtesy.

BSNL, according to one analysis, has been losing money for the past 10 years and a recent report by Kotak Institutional Equities estimated that its accumulated losses crossed Rs 90,000 crore last year. A Rs 74,000-crore revival plan proposed by the Department of Telecommunications had envisaged a Rs 29,000-crore pay-out for a Voluntary Retirement Scheme to trim BSNL’s bloated workforce. It had also suggested an expenditure of Rs 20,000 crore on 4G spectrum and Rs 13,000 crore to fund capital expenditure for 4G services. This plan was reportedly approved by a powerful Group of Ministers headed by Home Minister Amit Shah.

Surprisingly, thereafter the Finance Ministry is reported to have raised several objections to the proposal and now the PMO has set up a committee of secretaries to decide if BSNL can be revived, and if so how. BSNL remains an asset-rich company, and the estimated 11,000 acres it owns has been valued at Rs 65,000 crore. A revival, if one is attempted, must make commercial sense for there are limits to which taxpayer money can be expended on sustaining a lossmaking enterprise. On the other hand, closing BSNL down would mean bidding goodbye to one of independent India’s key state-run infrastructure initiatives.

It is not an easy decision and the search for answers through committees of ministers and secretaries is quite understandable. The decision, though, must be taken with a degree of urgency. Allowing sores to fester can never be part of a healing process, and if there are any doubts the government has on what it must not do, it need only look at Air- India.