Dt: 5/7/21
How Long Will BSNL/MTNL Continue To Be Millstones
Dr T H Chowdary*
MTNL (Mahanagar Telephones Nigam Limited) was created in 1986 and BSNL ( Bharat Sanchar Nigam Limited) in Oct 2000 . Telephone services provided in Mumbai & Delhi; and in the rest of India by the DOT were the remit of these two PSUs. In the initial years they had hardly any competition from the newly licensed private Telcos, (a dozen by the year 2010) . The decline and demise of these two telecom PSUs began soon after. Year after year they have been incurring losses. Together, the accumulated losses would be more than Rs. 60,000 cr. They had bloated number of employees and offices. Two years ago, they implemented a voluntary retirement scheme. More than half availed. Yet the loses continue. The financial performance of BSNL and MTNL in recent years can be seen in the tables below. They were no better before. They are recording of declining revenues and increasing losses.
BSNL: Financial Performance (Figs in crs of Rs)
Financial Year |
2017-18 |
2018-19 |
2019-20 |
2020-21* |
Total Income |
25,071 |
19,321 |
18,907 |
8,761 |
Total Expenditure |
33,809 |
34,225 |
34.406 |
12,368 |
Net Profit |
(-)7,993 |
(-)14,904 |
(-)15,500 |
(-)3,606 |
* for the first 6 months
MTNL: Financial Performance (Figs in crs of Rs)
Financial Year |
2018-19 |
2019-20 |
Total income |
2,606.71 |
2,227.02 |
Total Expenses |
5996.91 |
5,922.70 |
Loss |
3,390.20 |
3,695.68 |
2. Almost time -bound promotions are given with the result BSNL is heavily top-officered. Even as customers decline and losses increase, new and higher level posts like General Managers, Principal General Managers, Chief General Managers, Principal Chief General Managers and recently above all these, posts of Advisers (!) are created. As the lower ranks who remained are not “sufficient” to maintain and service the BSNL’s customers, (mainly governments’), many voluntarily retired employees are engaged as “contract” workers. Such people get two emoluments – pensions plus contract emoluments ! Repairs take too long as materials required are not adequately purchased for want of funds All these act negatively, customers drop out. Result is falling revenues, un- declining expenses and increasing loses !
3. It is absolutely un-necessary that the government should own and operate ill-performing , loss-making BSNL/MTNL (and Air India) when P-Telcos are providing every type of telecom services at a very small fraction of the per capita income, affordable even by unskilled labourers and beggars. If the BSNL / MTNL’s real estate ( buildings and sites) are auctioned, not only the accumulated losses will be made up; but may be sufficient to retire all employees. There are hardly any countries in the world having the dubious pleasure of state-owned telecom undertakings. Every effort so far of the GOI to resuscitate the MTNL/ BSNL has failed -neither will it succeed in future.
4. The Union and State governments can have private dedicated exchanges and (PAXs) hire/lease transmission capacity to interconnect them among themselves and interconnect with public networks of private telephone companies to facilitate communication with public. Government’s telecom facilities can be maintained by the DOT’s much reduced engineering staff. They will be an expense of government with no revenues from the public (just like PWDs) but only have license fees from the P-Telcos.
5. It may be argued whether some P-Telcos did not die. Yes, many did under vigorous competition from Reliance Jio . But the losses were for the share holders only. Now another company Vodafone-Idea seems to be heading for demise. It has a gross debt of Rs. 1.803 lakh cr . In the period Jan 2020-March 2021 it lost 24 mln customers to competitors, R-Jio and Airtel . Its woes are mainly due to the Shylockian demand by the DOT for a huge share from Adjusted Gross Revenues (AGR) of the company. Only its share holders and not any one else may be the loosers.
“Government in business means the ruination of people and if the Governments (or Public Sector companies) are rich, the people will be poor” – Thiruvalluvar
( The BSNL & MTNL are not even rich but loss-making to add to the ruination of government’s well-being)
The public sector is devoid of the living spring out of which flows human energy, and human enthusiasm and human vigilance. Laziness, indifference and barren dullness are the unmistakable and well-known marks of the public sector. We must reduce this necessary evil, the so-called public sector, to the minimum and not let it encroach and spread over fields where the private citizen's own interest can be well and safely yoked to the public interest. Wherever this has been done we have remarkable success in spite of every handicap that has been needlessly put in the way by a government that has fanatically adopted a wrong dogma.
-C. Rajagopalachari (Rajaji) , Swarajya, June 10, 1961
(Source: Freedom First, April-June 2004)
(721 words)
END