An Ill-intentioned Narrative of BSNL’s Financial Crisis

The BSNL Employees Union (BSNLEU), on Wednesday, issued a press statement with an objective to clear the confusion regarding the financial position of the company. The press statement was in response to a letter dated June 17, written by the BSNL management to the Department of Telecommunications (DoT) which prompted many media houses to report on the BSNL’s financial unviability.

According to the BSNLEU, despite the present financial difficulties, BSNL is continuously expanding its mobile customer base.

In 2017-18, BSNL’s mobile customers grew by 11.5%, significantly higher when compared to private operators like Airtel, Vodafone and Idea, which saw an increase in their customer base by 9.5%, 3.8% and 3.2% respectively.

The statement added that “the entire telecom sector is in ICU” and BSNL can’t be targeted as the only company to be gripped with this financial crisis because even as of today, BSNL’s outstanding debt is only Rs 13,000 crore. Compare this amount with the Vodafone Idea’s debt of Rs 1,18,000 crore; Airtel’s debt of Rs 1,08,000 crore; and Reliance Jio’s debt of Rs 1,12,000 crore.

The vacant land that BSNL owns throughout the country is also valued at Rs 1 lakh crore. Even while comparing BSNL’s 7.5 lakh route kilometre of optic fibre network – a cable network that allows faster data transmission – with that of Reliance Jio’s OFC network of 3.25 lakh route kilometre and Airtel’s OFC network of 2.50 lakh route kilometre, one can observe that the financial foundations of BSNL are “sufficiently strong”.

As recently as on June 26, the company, in order to compete with the predatory tactics of private firms, expanded its operations by introducing three new broadband plans, to be available from July 1.

However, despite the financial strengths, there’s no doubt that BSNL has been finding it difficult to survive in the highly competitive telecom industry, especially without any help from the central government.

Earlier, NewsClick had reported about the decision of the public sector enterprise to retrench 30% of its contractual workers due to liquidity crunch and negligence form the government.

Around the same time, BSNL employees, in Amritsar, were protesting for payment of their salaries pending for the past seven months. According to reports, employees working for past 20-25 years in the state-run telecom major were told just a day earlier that their contracts would not be renewed.

Moreover, the stringent conditions imposed by the DoT do not allow BSNL to take loans to meet its operational expenditures – despite having less financial liability than other private operators.

These policies and decisions are often marketed with a narrative that BSNL is facing a financial crisis. The narrative helps the ruling government in stepping on to the path of privatisation, where all the valuable assets of the public sector enterprise will be sold to private firms and customers will then be subjected to “merciless looting of private operators”.

In April, the Modi government proposed to implement the voluntary retirement scheme (VRS), reason for which was quoted to be the burden of over staffing.

While pointing to the year 2004-05 when BSNL had a net profit of Rs 10,000 crore despite employing a workforce of more than one lakh, the unions have opposed the “pro-Reliance Jio and anti-BSNL policy” of the government.

It is important to note that allocation of 4G spectrum to BSNL is still a pending demand among others.

On June 25, Cabinet Secretary PK Sinha convened an hour-long meeting with the Department of Telecommunications (DoT), to prepare a blueprint for the revival of the cash-strapped telecoms.

According to the media reports, the revival plan may include measures like salary cuts, and accountability of staff, in which employees have to either perform or perish.

Even Union Telecom Minister Ravi Shankar Prasad on Wednesday reacted to the ongoing crisis in the state-owned telecom service provider, but his statements only proved to be strengthening the ill-intentioned narrative that has, in the first place, put the enterprise in such a sorry state.

Also read: Modi Govt Is Destroying BSNL to Help Jio: BSNLEU Asst. Gen Sec