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PM calls for BSNL’s performance review as revenues fall

business Updated: Nov 12, 2009 21:45 IST
Manoj Gairola
Manoj Gairola
Hindustan Times

Alarmed by its falling numbers, the prime minister Manmohan Singh has called for a meeting to review the performance of Bharat Sanchar Nigam Ltd (BSNL). The company’s revenues fell by 6 per cent for the year ending March 2009 over the previous year.

Communications Minister A. Raja, Cabinet Secretary K.M. Chandrasekhar and Telecom Secretary P.J. Thomas will be present in the meeting.

The date of the review meeting has not yet been fixed.

The chairman and managing director (CMD) of BSNL Kuldeep Goyal did not comment.

Being a government company, BSNL has to follow a tendering system to procure equipment. This is a lengthy system and the results often take upto two years. During this period, private players have taken the lead in capturing the market.

“Whenever BSNL needed equipment most, it was not available due to interference,” said D.P.S. Seth, former CMD of BSNL. “As a result, BSNL’s marketshare in GSM has been slipping. At one stage BSNL was almost in the number one position in terms of subscribers.”

Today, it stands at the No. 4 slot in the mobile market.

The other, possibly bigger, problem plaguing the company is its employee structure. Most of its 268,000 employees belong to Groups C and D that comprise linesmen, telephone operators, clerks and so on.

More than 35 per cent of BSNL’s revenues go towards paying salaries. In contrast, its biggest private competitor Bharti Airtel’s salary bill is just 4.3 per cent of revenues.

Indian Telecom Service (ITS) officers who are responsible for running the company are paid a lower salary compared to their counterparts in the private sector. On the other hand, the non-core employees take home higher salaries. Clerks and peons take home Rs 50,000 and Rs 30,000 per month respectively.

“BSNL has excellent individuals with skill sets that are not being exploited and adequately compensated,” said B.K. Syngal, senior principal, Dua Consulting and former CMD of VSNL. Being a government-run organisation, BSNL is not allowed to give any incentive to its officials for good work.

With 10-12 companies operating in the sector, telecom has become a fiercely competitive business, with price wars raging. While this has affected private companies, the impact is more on BSNL.

“The government should privatised BSNL before it becomes too late,” said a BSNL official who did not want to be quoted.