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they are reasonably satisfactory,” says a telecom analyst.
One ref lection of poor governance is the fact that
BSNL frequently struggles to fill up even top direc-
tor-level roles, showing its inability to attract talent.
Out of the six whole-time directors (including the
chairman and managing director), just one is full-
time (Vivek Banzal), one post is vacant (HRD), and
the remaining four directors are holding the charge
as an additional responsibility until full-time direc-
tors are appointed. It has not had a full-time finance
director for the last couple of years, and since March,
there have been two appointments already. For a
loss-making PSU, it’s strange that the job of finance
director is being treated as non-essential.
The Fall of BSNL
BSNL was the fourth operator to enter the wireless
market. Private operators denied it roaming services.
BSNL imposed a similar ban. Later, when private op-
erators were struggling with network expansion in ru-
ral areas – and since BSNL was established in smaller
towns – it continued with its stubbornness and didn’t
let the private players use its tower infrastructure. It
realised its mistake after almost 10 years of denying
customers roaming services on its network.
But the real downfall started more than a decade
ago – in 2008 – when it f loated a tender for 93 mil-
lion cellular lines. The 50,000 crore tender was one of the world’s biggest telecom contracts that time. It caught everyone’s attention, including that of private rivals, and got stuck in a bunch of controversies. Tele- com equipment vendor Nokia-Siemens, for instance, accused BSNL of favouring select vendors and filed a case in the Delhi High Court against its disquali- fication on technical grounds. Eventually, the court cases, and probe by vigilance authorities, led to the cancellation of the mega tender. “They could have been market leaders if they had rolled out 93 million lines,” says Syngal. From 2009/10 onwards, the telco has been posting losses every year. Besides, BSNL had started with a lot of legacy issues. Its physical and human resource assets were mostly concentrated around the landline business where it had been operating for decades. It tried to shed the huge workforce over the years – the initial strength was close to 4,00,000 – but the efforts have fallen short of what’s required. Several attempts have been made to revive the PSU. Under the UPA government, the then telecom minister, Kapil Sibal, sought a bailout for BSNL even as the government set up a GoM to look into the funding of the PSU. In the first term of the Narendra Modi government, the market dynamics completely changed in favour of the newcomer, Jio, which offers dirt-cheap tariffs and continues to put the viability of other telcos under doubt. From a peak cash position of37,200 crore in
2007/08 to sitting on accumulated losses of `90,000
crore, BSNL is being increasingly seen as an entity that
survives mostly on government dole. Syngal says PSUs
like BSNL have been systematically destroyed by con-
stant interference of the Sanchar Bhawan (DoT). BSNL
didn’t reply to Business Today’s request for comments
on the article.
Subscribers
Market
share (in %)
Figures in
million for
May 2019;
2G sub-
scribers =
total wireless
subscrib-
ers - wireless
broadband
subscribers;
Source: TRAI
IT HAS FAILED TO
MAKE A MARK IN
BROADBAND, TOO
2G MARKET
SHARE IS A
MERE 17%
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Subscribers
Reliance
Jio
Bharti
Airtel
Vodafone
Idea
BSNL
Market
share (in %)
Figures in million
for May 2019;
broadband
includes both wire-
less and wireline.
Source: TRAI
10
8.^9
9
18.
8 %
21.66
3.7%
(^32)
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9
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(^11)
(^8).
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. 4
%
August 11 I 2019 I BUSINESS TODAY I 57PROPORTION OF
SUBSCRIBERS
WHO ARE
INACTIVE58%