Outside BSNL’s corporate office in Janpath Road, New Delhi, a group of employees of the state-run enterprise were discussing how to manage their monthly expenses if their monthly salaries were delayed once again. One of the employees, who has been at the company for over a decade, admits that the morale of employees is at an all-time low, with many of them already looking for employment opportunities elsewhere — not a sign that embodies confidence in a positive conclusion to the ailing public sector firm’s current troubles.
But another employee, who sounded a bit optimistic about the government’s promise to revive the ailing PSU, said that they would do their best to help the company get out of the danger zone. “If it is required, we are willing to compromise further on our perks to cut expenses, as around a million people are dependent on BSNL,” he said, not wanting to be identified.
Facing an uncertain future, the public sector behemoth is likely to delay crediting the June salaries of its employees since it does not have enough working capital to meet wage expenses. The government, however, has promised to do their best to revive the company, but without disclosing any details.
Once a shining light in India’s PSU ecosystem and earning annual profits in excess of Rs 10,000 crore, BSNL is now going through its worst phase ever, with many speculating that the company is just a few steps away from a shutdown. The telecom giant at present has an overall debt of over Rs 13,000 crore, and in less than a decade, has gone from being a profitable company to the highest lost making PSU in the country, with accumulating losses amounting to Rs 90,000 crore as of the end of December 2018. Be it its oversized headcount, poor management or inability to upgrade infrastructure, the telecom service provider (TSP) is facing problems on every front.
At a time when the country is gearing up to launch 5G services, BSNL is yet to capitalise on 4G. The entry of Reliance Jio in the sector, leading to a pricing war, only worsened things for BSNL. Revenues in the financial year 2017-18 stood at Rs 27,818 crore, down 14 per cent from the previous year. The company’s losses too widened from Rs 4,500 crore in 2016-17 to Rs 7,992 crore in 2017-18.
BSNL also admits the impact of Jio on the firm’s fortunes. BSNL Director of Finance S K Gupta last month wrote to all chief general managers of telecom circles flagging the “fiercest-ever competition” being faced by the telecom sector and said “predatory tariff offerings by the competitors” has triggered a sharp decline in revenue from services.
While promoters of private telecom operators, including Jio, are investing thousands of crores, BSNL is awaiting a government decision on the allotment of the 4G spectrum to compete in the market. Its employee strength of 1.80 lakh is also blamed for being a major cause for its troubles. The government on Wednesday, for instance, admitted this fact and pointed out the total employee cost of MTNL and BSNL far outweighed the total employee cost for private telecom companies. The employee cost for BSNL is 75.06 per cent of total income, while for MTNL, the number stands at a whopping 87.15 per cent. In contrast, employee cost for private telecom companies varies between 2 to 5 per cent of the total income.