For 163,000-workforce it’s a never-before disaster in the company’s two-decade-long history. Delayed salaries. Trapped vendors outstanding. Missing 4G. Legacy network. These are the few attributes that are equally worrying BSNL subscribers, partner firms, employees and their families.
With the much-awaited telco’s revival plan being dragged by indecision of <\/span>the government, the state controlled-and-operated telecom service provider is fast approaching <\/span>a dead end with no point of return, say experts<\/span>.<\/span>
Among the steps include auctioning telecom infrastructure and real estate assets of BSNL. <\/span>But, experts note that they may not find too many takers <\/span>in the present economic slowdown-like situation.<\/span><\/span>
The state of affairs at the public sector company has deteriorated to an extent that in many tier-II and beyond locations, the telco’s network often shuts down during grid power disruptions. Here comes a peculiar situation. Some consumers now use their BSNL-powered cellphones meant for digital connectivity to measure the extent of power outage in their respective areas.
“When the electricity goes off, our phone stop working, and by this way, we also get to know if the power supply is disrupted up to a far area where BSNL antennas are deployed,” a consumer having a BSNL connection since 2005 in Lucknow said.
The telco officials on the condition of anonymity say that in some cities and towns, the base transceiver stations (BTS) lack diesel procurement, following outstanding to vendors which have finally stopped fuel supply.
The inimical situation is more pronounced now. But, who’s to blame? The Department of Telecommunications (DoT), the Ministry of Finance (MoF) or the policy<\/a> think-tank Niti Aayog, or the BSNL board or all of them <\/span>together?<\/span>
The distressed vendors who are running from a pillar to post to secure their outstanding from to save their firms from closure, have even become more apprehensive now on the survival of the state-run company.
What’s the crisis?<\/b>
The telco was making timely wage disbursals and the outstanding clearances to the vendor-partner community as late <\/span>as of January this year.<\/span>
In 2005-06, BSNL hit the highest revenue to Rs 40,176 crore. The annual income has now come down to Rs 19, 308 in 2018-19, nearly 20% down from Rs 25,070 in 2017-18. The revenue is expected to fall further if the telco continues to operate without 4G commercial services, with 5G looking a distant dream<\/span>.<\/span>
BSNL had started to show signs of distress almost a year ago, and was <\/span>caught between the devil and the deep blue sea, on the back of falling revenue coupled by the telecom department’s advisory to discourage capital spending.<\/span>
The state-owned telecom operator has now plagued with multi-faceted issues. The falling revenue, following non-availability of a data network in a highly-competitive sector, has led one to look at a whopping or 75.5% employee cost outgo. The telco requires nearly Rs 800 crore on a monthly basis which requires a structured drop going forward.<\/span>
The company’s profitability started to get <\/span>hit as the <\/span>telco lost users and revenue in the absence of <\/span>fourth-generation or 4G airwaves in an industry increasingly skewed towards mobile data progression.
However, BSNL needs a soft loan as early as possible, to disburse wages for contractual or casual workers as well as to pay outstanding power bills and rentals – that may anytime trigger outage with data centre and exchanges have round the clock supplies prerequisite.
More than Rs 3,500 crore worth of outstanding dues to vendor-partners should be cleared to win back trust, and business continuity.
The much-sought stimulus package essentially being considered at the highest administrative levels, is needed before it gets too late.
Way forward<\/b>
Former chief Anupam Shrivastava<\/a>, during his four-year stint, had introduced a slew of internal cost-cutting measures, and grew <\/span>the <\/span>once-dwindling enterprise business to as much as 30% of the overall business <\/span>and that trajectory should not be only maintained but the company needs to find newer business opportunities across private and government segments, said analysts<\/span>.<\/span>
The mammoth and dispersed telecom infrastructure as well as valuable real estate assets— ranging from land parcels to residential complexes — most of which are lying idle or with little use, should <\/span>be either leased out or sold off.<\/span>
With 7.6 lakh route kilometer of fibre, and as many as 68,000 network towers, it is time for the state-owned telco to look at innovative models similar to ones being adopted by private sector peers to gain revenue.
One of the options being tabled is a ‘sale and leaseback’ model that would not only increase income but also minimise operational (opex) expense. Based on infrastructure investment trust or InvIT principle, the strategy may attract institutional as well as individual investors.
“Optical fibre assets can be transferred to a step-down a subsidiary which could be at arms-length to BSNL and provide high quality services to various telecom operators and other users,” Sandeep Aggarwal<\/a>, c<\/span>hairman of the Telecom Committee at PHD Chambers, <\/span>told ETT.
Following Indian billionaire Mukesh Ambani-owned Jio’s efforts to monetise its pan India optic fibre assets to deleverage its balance sheet, the older incumbents such as Vodafone Idea and Bharti Airtel had also explored converting their <\/span>optic fibre network entities<\/span> into InvIT to reduce debt and free up cash.<\/span>
BSNL has way more fibre optic cable deployed than the rivals combined, with an estimated value of Rs 55,000 crore. Jio has 3 lakh kilometres of fibre network, followed Sunil Mittal-driven Bharti Airtel’s 2.45 lakh kilometres and Vodafone Idea’s 1.55 lakh kilometres.<\/span>
“BSNL has assets which are useful for rival telecom service providers and companies like Amazon<\/a>, Google and Facebook<\/a>,” Aggarwal said, and added that InvIT method can be used to generate funds for the stressed telco.
In addition to revenue maximisation exercise spanning across verticals, telco’s network upgrade and expansion programs should be restored, with a renewed focus on customer service.
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