Sibal to follow carrot-and-stick policy to turn around BSNL
Determined to turn around loss-making PSU BSNL, telecom minister Kapil Sibal says he will adopt a 'carrot-and-stick' policy with an aim of getting desirable results within six months.business Updated: Jun 28, 2011 17:08 IST
Determined to turn around loss-making PSU BSNL, telecom Minister Kapil Sibal says he will adopt a 'carrot-and-stick' policy with an aim of getting desirable results within six months.
"The point is we must have targets for circles. If you don't you will be transferred out and those who will do well will be rewarded, may be they should be given a posting of their choice," Sibal said.
BSNL, once the country's flagship telecom company, posted a net loss of Rs 1,823 crore on revenue of Rs 32,046 crore in 2009-2010 and is also likely to post losses for the last financial year ended March 2011. The company had a net profit of over Rs 10,000 crore in 2005-06.
In terms of mobile subscribers, BSNL has been relegated to the fifth position from second just a few years ago as it has failed to match the competition from private players like Bharti, Vodafone, Idea and Tata.
"The kind of assets BSNL has nobody else can have in this country. We need to use those assets for profit for public service ultimately. If you run at a loss you get subsidies and then all that money goes down the drain," Sibal said.
Department of Telecom (DoT) has instructed all 24 territorial circles to realise 25% growth in their revenues on year-on-year basis, failing which they will be denied their monthly funds allocation.
BSNL's chief general managers in all 24 territorial circles have been categorically asked to mop up monthly revenues from the broadband, Wimax, mobile, value-added services and leased circuits businesses.
"...I am committed to turn around the performance of BSNL within six months and is closely monitoring the operations of the organisation," he added.
Under the revenue maximisation strategy, BSNL's circles have been divided into three-revenue wise categories, including those with less than Rs 10 billion revenue, those with Rs 10 billion-Rs 20 billion revenue and circles with revenues in excess of Rs 20 billion.
Earlier, a government body Board for Reconstruction of Public Sector Enterprises (BRPSE) had recommended that BSNL should merge its counterpart MTNL, a move that will help turn around the loss-making telecom giants.
BSNL had informed the panel that it expects to turn profitable in the year through March, 2013, but projects a net loss for the just-ended fiscal year and the ongoing year that began on April 1.