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


Can “Packages” Save the Humpty- Dupmty BSNL ?


Can “Packages” Save the Humpty- Dupmty BSNL ?



Dr T H Chowdary*





Academicians have attributed several traditional strengths to the public sector .


They primarily are:


-ability to survive without profit

-state-ownership gives than immortality

-wages and high bonuses can be paid over by continuously incurring losses

-government  ownership gives full benefit of a monopoly

-          Vasant Sathe,  

Restructuring of Public Sector in India



Government in business means the ruination of people and if the Governments (or Public Sector companies) are rich, the people will be poor”

– Thiruvalluvar


Sri Ashwini Vaishnaw, Honourable Minister for Communications proudly announced the following  give -aways  to the  consistently loss-making Bharat Sanchar Nigam Ltd (BSNL)  and  Mahanagar Telecom Nigam Ltd (MTNL), the  former wholly owned by the  government while the MTNL  has  a few other investors, all these in a bid to  turn around the loss -making telecom operators.


2. The record of BSNL:

·         BSNL has suffered  Rs. 50,632 cr losses in the last 5 years

·          It posted Rs. 7,441 cr loss in 2020-21 and Rs. 15,500 cr in 2019-20

·         The government had infused Rs. 70,000 cr in BSNL in 2019

·         The BSNL will be given Rs. 1.64 lakh cr package  in a  bid to turn around the loss-making operator. 

·         Government will allot  900/1800 MHZ band spectrum worth Rs. 44,993 cr to help it expand its 4G services   (while the private telephone companies are  about to introduce 5G services where  the speed of delivery of data is 10 times more than in the 4G  services ).

·         To help BSNL  to meet its projected capital expenditure for the next 4 years,  government  will give BSNL Rs. 22,471 cr.  Another Rs. 13,789 cr will be  provided as viability gap funding  for rural wireline operations done between 2014-15 , 2019-20. ( This is an arbitrary claim of the BSNL )

·         The authorized capital of BSNL will be increased from Rs. 40,000 cr to 1.5 lakh cr  in lieu of  adjusted gross revenue (AGR) dues ,  provisions of CAPEX  and  allotment of  spectrum

·         To destress BSNL’s balance sheet, government will provide sovereign guarantee for the Telco  to raise  long term loans. It will enable the  company to raise   long term bonds for Rs. 40,399 cr and  BSNL’s AGR dues of Rs. 33,404 cr which will be settled by conversion into  equity.

“We promise according to our hopes.

We perform according to our abilities”

- A wise old saying


The amounts  given as package to the consistently loss-making BSNL are  humongous . This is the  most reckless  give- away of  tax payers money to  the “humpty-dumpty” like BSNL.


3. It is not understandable as to how  the wise  BJP -led NDA government can squander so much money of  the  people on hemorrhaging  PSUs, the BSNL (and MTNL also).  The amounts given to BSNL will be the single largest waste of money  by   a talent- studded BJP-led NDA government. No bank, no other public sector company was bestowed such huge money into the  bottomless  hole that the BSNL/MTNL are becoming.


4. Earlier packages  and  free allotments of spectrum had not saved this company. It effected the voluntary  retirement scheme shredding about  80,000 employees.  That has not saved the company from hemorrhaging .   The present give-away may seem to be  triumph of   hope  over the actual ability of   BSNL / MTNL .


5. Government dithered  in prolonging  the life of  Air India  while every thinking person knew  that that PSU could not be saved  in the environment of competition from private airlines. Government  had  finally sold  it  to its  emotional   saviour , Tatas from whom  it was taken over  decades ago and run into losses year after year.   It is quite  certain that BSNL/MTNL as long as they are held by the government cannot be saved by any amount of  infusion of precious government tax and debt raised money  into these companies.


6. Has the government got any enforceable assurance  from  the present management  of the BSNL that with all the money that is being  gratuitously poured into this company, it will gain customers, become profitable and pay back its  debt ? If  the  management fails  to uplift the  company, will they be penalized  by say, withholding the pension of the managers? Have not there been assurances earlier from the management that the VRS and  packages of money  the company received would stem the losses and the company would be profitable?


7. Will the public be informed  as to  how many customers of BSNL/MTNL were lost year after year in the last 10 years and what is the ARPU ( Average Revenue Per User per month)  for the last 10 years and what it is now  (the R-Jio‘s ARPU currently is Rs. 180 )? What % of the subscribers  are active for each of these  companies;  how many subscribers are there per employee, what is the revenue per employee and the pay put per employee per year ? 


8. The amounts being given and the concessions being made  for the BSNL/MTNL  are unprecedented  for any other  public sector  company in the country.  For the last decade I have been submitting memoranda to the   ministers and writing articles for public awareness  that it is impossible for  the  state-owned  company, BSNL to withstand competition  from private companies.  The main reason is  that no  person  will lose his  job if the company  goes on failing. The company‘s policies and  purchases of equipment are in the final analysis  decisions of  the  Minister and the  ministers in the past  had  hardly  shown honesty of purpose and determination to achieve .  Some ministers delayed   the purchases of equipment  by the  BSNL/MTNL  for so long so that  these companies’ rivals  in the meantime  introduced new services and expanded  the existing  ones  and  the private companies grabbed the market. No minister  has come to grief or had been held responsible for the failures  of the BSNL/MTNL excepting Pt. Sukhram and D. Raja for a little while. The handling of the Communication Ministry by the DMK ministers was  a total scam. One of them  had even a  private telephone system  built for his  private company utilizing the  BSNL’s network, free of cost.


9. The interest of the country  and the finances of the GOI  require a study of the  performance  of the  BSNL and  the private  telephone companies  in regard to the  parameters given in the  table below.







% Market share

















Air Tel




























Subscribers per employee

Subscribers added/lost



Staff cost as % of revenue

Revenue per employee

Expense per employee

















Air Tel























10. It is really baffling  that  a scam-free BJP-led NDA government is  going to waste so much public money   by  bestowing it on  the irretrievably loss-making  company. Government must  reconsider the “package” gift in good time  rescind  the decision. (1,085 words)