Memoranda for Submission to the Chief Ministers of the Two Telugu States.

Telecom Engineering

How Long Will BSNL/MTNL Continue To Be Millstones


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





Total Income





Total Expenditure





Net Profit





* for the first 6 months

MTNL: Financial Performance (Figs in crs of Rs)

Financial Year



Total income



Total Expenses







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)