BSNL’s Future Hangs In The Balance: Government Asks Telecom PSU To Consider Revival Scheme, Disinvestment Or Closure

The government has asked financially-stressed state-run telecom operator Bharat Sanchar Nigam Limited (BSNL) to consider options, ranging from a revival scheme to disinvestment to even a closure, reports Economic Times (ET).

In a presentation, BSNL was asked to submit a “comparative analysis of all options available with the government, i.e. strategic disinvestment of BSNL, closure or revival with financial support.”

While BSNL’s losses stood at Rs 4,859 crore and Rs 4,786 crore FY 2015-16 and FY 2016-17 respectively, they expanded to Rs 7,992 in FY 2017-18. At the end of FY18, the cumulative losses of the company stood at a massive Rs 31,287 crore.

Also, the government’s public policy think-tank, NITI Aayog, has warned against introducing Rs 14,000 crore of preferential equity in both BSNL and MTNL, the other state-run telecom company. The think-tank considers it wasteful to allocate 4G spectrum worth thousands of crore to these central public sector units (CPSUs).

Jio’s Impact

The fortunes of BSNL took a turn for the worse as the competition in India’s telecom sector intensified with the launch of Reliance Jio in 2016. Also, affecting BSNL’s performance is its ageing workforce, who are all government employees. Thus, firing them is not an option to improve efficiency.

However, employees could be given a voluntary retirement scheme (VRS) to mitigate this problem. Also, it is estimated that BSNL could garner Rs 15,000 crore by monetising its real estate properties across the country.

Also Read: 10 Reasons Why Mukesh Ambani’s Jio Is Winning The Telecom Sweepstakes