Stop BSNL's downward spiral to 'sick' status
Rajeev Chandrasekhar appeals to PM: "Revamp and empower BSNL Board to ensure a turnaround to profitability."
Tweet-- Rajeev Chandrasekhar, independent Member of Parliament and Member of the Standing Committee on Finance, today expressed grave concern about the deteriorating financial situation and abysmal state of affairs of Bharat Sanchar Nigam Limited (BSNL), a navratna public sector unit. Mr Chandrasekhar appealed to Prime Minister Manmohan Singh to intervene immediately to save BSNL from collapse as well as to prevent a downward spiral in its valuation, which will be an immense loss to the Exchequer as well as taxpayers and other citizens - the real owners of the PSU.
"For the past two years, BSNL has seen sharp erosion in profits and posted huge operational losses. BSNL's falling revenues, falling profits and falling market share are baffling since telecom companies of this size have been posting robust performances worldwide, not just in India," Mr Chandrasekhar emphasized.
While many private telecom companies have seen significant revenue and profit jumps, BSNL has lost market share and grown much below the industry average in the mobile segment. From a profit of Rs4,231/- crores in 2005-06, BSNL reportedly incurred losses of Rs4,086/- crores in 2008-09, rued Mr Chandrasekhar. Given this sad state of affairs, in the near future BSNL could end up being declared a 'sick' company.
Although comparisons with Air-India seem apt, Mr Chandrasekhar pointed out that Air-India operates within an industry that's in the throes of a vicious downturn. But BSNL operates in the dynamic telecom sector with high growth rates. BSNL's problems have more to do with management and interference from the Department of Telecommunications (DoT). These problems partly stem from BSNL's inability to respond promptly on capital expenditure and purchase issues and without interference from the Telecom Ministry. This affects network rollout and expansion plans - so critical in retaining customers and winning new ones in an ultra-competitive market.
"The Government must act before it is too late and implement turnaround measures like those being undertaken at Air-India, including revamping the management and boards," urged Mr Chandrasekhar. A professional Chief Operating Officer must be appointed via a national/international search. The BSNL Board must also be revamped with industry experts and empowered to decide speedily on all purchase and procurement issues.
Worldwide, many Government-owned telecom companies have emerged as competitive, profitable entities, including British Telecom, Singapore Telecom, Telecom Malaysia, Telecom Norway, etc. "There is no reason why India - a technology powerhouse - cannot do the same. This is especially important since Disinvestment has paid rich dividends in the past in augmenting the Treasury. But BSNL must first be restored to its previous position and profitability if the Government of India and its citizens are to benefit," concluded Mr Chandrasekhar.