MTNL AND BSNL MERGER? DREAM ON…..

about 3 years ago
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By Ruma Dubey

For a layman (includes woman too!) be it Mahanagar Telephone Nigam Ltd (MTNL) or Bharat Sanchar Nigam Limited (BSNL), it is all one and same. What comes to mind is that be it MTNL or BSNL, both are Government run companies and they provide telecom services. Those living in Maharashtra, are used to MTNL, mainly landlines and most of us metro dwellers come across even the name of BSNL only when travelling to remote spots like Ladakh, J&K, forest regions, Uttarakhand and such not-too-easy-to-access places.

But essentially both MTNL as well as BSNL are doing the same thing only regions are different. MTNL has operations in Delhi and Mumbai while BSNL has operations in the entire country, except Delhi and Mumbai. Both together have a market share of around 9% of the total wireless subscriber base of 1.12 billion.

This is so typical of any PSU – they start the race and it remains number one as long as no one else is allowed to participate; the moment others the race, they continue to run at the same slow trot, allowing all others to overtake and trample all over them.

BSNL and MTNL enjoyed monopolistic status till the sector was thrown open to the private sector and since then, they just about exist. Today, with the arrival of Jio there is a major shake-up in the industry and a massive consolidation is underway. Yet, MTNL and BSNL continue to run like as though nothing has changed.

Today, MTNL was in the limelight on the bourses as once again talks were revived about a merger with BSNL. This talk was mooted decades ago by the then telecom minister, Pramod Mahajan. Time and again, the talk catches some fervor only to ebb soon.

This time too, like all other times, they say that the talks are “serious.” The Govt is looking at possibility of taking over mobile operations of MTNL in Gurgaon, Noida and Faridabad, where it is already offering landline and broadband services. Other possibility being explored is BSNL acquiring MTNL’s mobile operations in Delhi and Mumbai.

But the BIG question being asked – will this ever happen? Trade union is very strong in both the companies, typical of any PSU. Few years ago, divestment of Govt stake in BSNL was mooted. In fact that too has been talked about for years and years, the divestment plan just gets passed on from one year to the other but divestment plans even never take off. The Union at BSNL has always very stiffly opposed any move by the Govt to sell stake. Ditto for Air India; every time it decides to sell stake, despite being a white elephant and draining away all the precious tax payers money, the Unions fight tooth and nail and never allow it to happen.

So why do Unions oppose privatization? Or the other way of looking at this – why do most feel that privatization is good? Well, the first and foremost thought that comes to mind is that efficiency will go up. We feel that better products and service will be delivered and that too within a set deadline.

But for those employed, privatizations often means longer working hours, more responsibility and accountability. It also brings forth fears of job security and that probably is the single biggest reason – they fear the hire-and-fire policy of the private sector and feel that their jobs, which in a PSU are secure till they retire will no longer be so.

Does this mean that all trade unions then are Left-aligned or Communists? Actually most of the Unions are more Right than Left and they oppose not against the administration but as an ideology – it’s a trade union and hence it has to oppose privatization; it’s like one of the tenets of the union. Also, trade unions fear that once the organization gets privatized, their wings will be clipped as unions in private sector do not have as much freedom as those in PSUs to oppose anything and everything from recruitment to other union activities. Thus trade unions fear privatization on ideological as well as their own existential fears.

A company looks at ways to maximize its profits while the trade union looks to maximize the benefit of its employees. And it is here that opposition arises – the Union feels that the company will impinge on the objectives of the employees and trade union.

The trade unions need to wake up to reality and see the sea of change sweeping the country. Or else one day they will face the same fate as HMT and many other PSUs – no company at all to defend.

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