BSNL BAILOUT - NO WASTE OF MONEY THIS!

about 2 months ago
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There is a lot of brouhaha over the Govt looking at the option of bailing out telecom PSU, Bharat Sanchar Nigam Ltd (BSNL).  The Govt is mulling giving BSNL Rs.13,000 crore as salaries have not been paid for past two months. The proposal includes Rs 6365 crore voluntary retirement package and 4G spectrum allotment through Rs 6,767 crore equity infusion and monetisation of real estate assets.

It is being said that it is another Air India story being played out. Many are lashing out saying it is wastage of the tax payers money and it needs to be shut down or privatized.

Well, Air India and BSNL are two different issues – cannot compare oranges and apples. Air India needs to be privatized but there are no takers. Bailing Air India out is a bad option and that is indeed serious wastage of public money.

But BSNL is not such an easy cut and dry kind of case. You don’t need an Air India today to travel to remote places in the country but go to North East , Spiti Valley or Jammu & Kashmir; any remote place in India – the only telecom network that works is that of BSNL. This Govt owned PSU does remain the sole line of communication with the outside world for many. Over two crore people subscribe to BSNL.

That apart consider this - BSNL gives employment to around 1.7 lakh people directly when employment generation is at its lowest in last 45 years. That’s a huge number and also one of the reasons why it has become a white elephant – 65% of its revenue is eaten away by salaries.

For those talking about privatization, the existing companies like Vodafone and Airtel have already been given a run for their money by Reliance Jio. All private telcos are making huge losses due to predatory pricing of Jio and BSNL is no exception.

BSNL’s loss in FY19 is estimated at Rs.7000 crore and its current debt stands at Rs.13,000 crore – this is the lowest in the sector as Vodafone Idea is sitting ona  debt of Rs.1.2 lakh crore and Bharti’s debt is at Rs.1.06 lakh crore.

Also remember, the private sector telcos, were given concessions by the present Government to help them for repaying their debt to the banks by extending the spectrum charge payment instalments from 10 years to 16 years and the Government is examining the issue of extending further concessions to them. In that context, BSNL received no such concession. The Govt has been delaying the process of giving 4G spectrum allotment to BSNL and it is only now that it has received the Letter of Comfort for taking loans from national banks to tide over the present crisis.

Thus for us to now cry over BSNL bailout is not right. We cannot have just one monopolistic player in the market. And most certainly not at the cost of so many people losing ther jobs. How many jobs has the private sector created? Well, jobs creation is a murky data, so let’s not go there at all.

The best solution is to merge MTNL with BSNL; we are merging smaller banks to create mega banks, so why not in the telecom sector where it is actually needed? Also, if the Govt goes ahead with the VRS and manages to reduce the headcount, that too will help bring down the costs. The towers and training centers could also be rented out, while monetization of land assets alone can bring in close to Rs.7000 crore.

Bailout of every Govt organization cannot be labelled as “bad and unfair.” We need BSNL, its reach is far and wide; it is like the SBI of India. And the entire country cannot be led by Jio!

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