BSNL (Bharat Sanchar Nigam Limited), will bid farewell to more than 54000 employees this year. This comes as a shock to the unionized labor force and many other workers of other public sector units.
It all started in the British era when the East India Company established telegraphic services by the India by royal decree of 1885” The telegraph act”. The first telegram was sent from Calcutta to Diamond Harbor. Diamond Harbor was trading point for the British Ships that came to Bengal. Later it came to be called as post and telegraph services. In 1980, there Department of Post got separated from the telegraphic services and thus formed the BSNL. It not only provided telegraphic services but also telephonic services to various government departments. The BSNL stopped the telegraphic services in 2013.
The BSNL was making profits since it’s advent in 1980 on a huge basis as there was only land telephony and BSNL was the monopoly firm providing the services. The mobile or the cellular services launched in India by the private firms in 1995 eluded the majority. Handsets were expensive and so was the cost of calls. Even the person who received calls had to pay some money. This was the real drawback for the advance of the cellular services. However, the government endeavored to liberalize telecom and therefore formed TRAI, Telecom Regulatory Authority of India to set the policies and tariffs of telecom matters for private and government players.
As time went by liberalization took place further and telecom circles are specified and the spectrums were auctioned in those circles. Multiple bidders were allowed in a single circle that allowed competition among the service providers and this was the first step towards making cellular services affordable.
BSNL later launched DataOne services for broadband services as well as fixed land telephony. The fixed land telephony was been phased out by the customers. People made good use of the cheaper Chinese or fancy Korean mobile handsets and cheaper data and free voice services to replace the old fashioned heavy telephone apparatus. The fixed telephony segment started a steep decline but due to its obligation to government departments, they had to provide the inefficient, and costly services for another decade which rendered it sick.
Even the Dataone services of BSNL were not very popular, it was slow and costly compared to its private competitors. This is another blow to its revenue. When the private players are making profits and increasing their market shares, BSNL kept on losing the market share and the existing revenue on its services. BSNL, once was considered Navratna soon became a White Elephant. Mounting loses did not prevent BSNL from retaining its existing workforce. It not only retained its workforce but continue to pay the increments and huge bonuses. The unionized workforce drained the exchequer. The weak Congress government kept on pandering inefficiency.
The BSNL accumulated loses stands at 90000 crores. BSNL along with AirIndia contributes to 50% of all the loses of the PSUs till date. During the election time, BJP did not want to aggravate the workforce, but silently wanted to layoff a huge number of people, a staggering 31% of the workforce which comes to 54000.
After the news, the BSNL employees started demonstrating at every office. They wanted that the 4G Spectrum should be given to BSNL for free to enable it to compete with the private players. This was however contested at the Supreme Court that national assets are best allocated through open market bidding. Some experts also said that the allocation of 4G spectrum was too little or too late. BSNL should have entered the 4G long ago when it was losing the market share to the private players in cellular services. The tariffs are too competitive to generate adequate revenue to cover the present expenses and little chance of paying back the huge losses.
The Modi government wants efficiency to be incorporated in every sphere. BSNL has to evolve and fight in the market to survive. The board of BSNL has drawn up a plan to reduce workforce. The average age of BSNL worker is 55 years and above. Reducing the retirement age from 60 to 58 and creating an attractive VRS package to make people leave is a pleasant way getting rid of excess flab. The board will take a final call after the general elections. It is not known who will get the majority, but if the right wing pro capitalist party wins, BSNL will find itself in the pages of history by 2020.