Oppose the government’s plan to privatise BSNL
The government has been doing a lot of propaganda to justify the privatisation of the public sector telecom service provider, Bharat Sanchar Nigam Limited (BSNL) and to hand over the huge assets of this state-owned company to the big monopoly corporate houses at throw-away prices. Employees of BSNL are in struggle, to oppose this move.
Mazdoor Ekta Lehar (MEL) spoke to Comrade Sebastin, (referred to below as CS), General Secretary of the BSNL Executives’ Association. He explained in detail about the history of the company, the subsequent developments in the telecom sector in our country and the current moves towards privatisation of BSNL. We reproduce below excerpts of the interview:
MEL: When was BSNL started?
CS: BSNL formed on January 10, 2000 by corporatization of the service providing arm of the Department of Telecommunications of the Government of India (DoT).
MEL: What were its stated objectives when it was started?
CS: BSNL was started with the specific aim of giving a boost to the development of the telecom sector of the government. It was developed as a public sector company which could operate in the telecom market along with other private operators. It was envisaged that BSNL would also play the role of a regulator, setting the standards of operation for the various operators in the telecom sector in our country. The liability of the government for payment of salaries to about 3.25 lakh employees in the telecom sector was thereby transferred to BSNL.
MEL: What would be an approximate evaluation of the assets of BSNL at this time? What kind of assets are these?
CS: BSNL has huge land assets throughout country, including Delhi and Mumbai, at prime locations in each city, town and village. The value of its assets is second only to those of Indian Railways. Officially, the land assets alone are worth Rs. 1.15 lakh crores as per the 2014 Govt. rates for the land assets available in A, B and C1 class cities. Today it will be much more. Including the land assets in smaller towns and villages, the total land asset value will be more than Rs. 3 lakh crores as per the market value.
BSNL has maximum Optical Fibre network, more than 7.5 lakh route km. BSNL has Optical Fibre connectivity in every corner of the country. In comparison, OFC network of Reliance Jio is 3.25 lakh route km, Airtel is 2.5 lakh route km and Vodafone Idea is 1.6 lakh route km
BSNL has more than 66,000 towers, ranking third among all telecom operators in the number of towers.
MEL: BSNL continued to be a profit-making venture till about 2008-09. What steps were responsible for turning it into a loss-making one?
CS: BSNL was given the responsibility by the government to provide telecom services to rural and remote parts of the country. BSNL maintains 17,000 to 18,000 telephone exchanges in rural and remote areas. At the time of its formation in 2000, the Union Cabinet had declared that the government would “look after the financial viability of BSNL”, i.e. all losses incurred by BSNL on account of providing services to remote areas would be borne by the government. However, after 2006, many of the subsidies given by the government were withdrawn. On the other hand, the government took many steps to promote the interests of the private players in the telecom sector.
Interconnect Usage Charge (IUC), which is a cost paid by one mobile telecom operator to another when its customers make outgoing mobile calls to the other operator's customers, were reduced drastically by the government to benefit private operators.
By 2006, BSNL was earning a net profit of Rs. 5000-6000 crore per year. Its volume of services were nearly the same as that of Airtel. Betwen 2007-2013, 4 mobile tenders, with capacities of 45.5 million connections, 93 million connections, 15 million connections and 5 million connections respectively, were cancelled by the government on various flimsy grounds. Till 2013, BSNL was prevented by the government from using Chinese manufactured components in its services in the border states, whereas there was no such restriction on private operators. This greatly affected the expansion of BSNL in the Northern and Eastern regions of the country. The removal of this restriction in 2013 enabled BSNL to grow till about 2016.
In September 2016, Reliance Jio launched its services, with the open support and promotion of the present government. The government, through the Telecom Regulatory Authority of India (TRAI), allowed R-Jio to provide free services for almost 6 months (contrary to its own regulation of allowing free service for only 3 months). It turned a blind eye to the predatory pricing by R-Jio.
As a result, the revenue for other private operators came down by 40-45% during the last 3 years, which is much more than the revenue loss of BSNL. Aircel, Reliance Infocom, TATA Teleservices, Docomo, Telenor, Siestma (STel) and several other operators were forced to shut down services, while Vodafone & Idea were merged.
BSNL was not allowed by the government to participate in the 4G auction, under the pretext that it was a public sector undertaking and should not participate in an open auction with other private operators. Actually, this was done in the interest of the private operators and to justify the closure of BSNL in the name of its “inability to provide competitive services”. Following a prolonged agitation by BSNL employees in 2017, the Minister of Communications had agreed to the employees’ demand that BSNL should be allotted 4G spectrum. But this has not been granted till now.
The government did not allow BSNL to take loans from public sector banks to expand its operations. Other private telecom operators have been allowed to take bank loans of more than 1 lakh crore each, even though they have huge debts to the banks, totaling more than 4.25 lakhs crores (Vodafone Idea having 1.18 lakh crores, Airtel having 1.08 lakh crores and R-Jio having 1.12 lakh crores). On the other hand, BSNL has the least liability, just about 20,000 crores.
The posts of the Board of Directors of BSNL have not been filled regularly by the government. Some posts have been filled on temporary basis. At least one post has been lying vacant for the last 6 years.
MEL: What is the propaganda that the government and media have been carrying out to justify selling off BSNL to private hands?
CS: The government and the media have been saying that there is no need for a government telecom operator, as private telecom companies are giving the required services. They are claiming that BSNL is a loss making company, even though the total loss of BSNL is just 16,613 Cr rupees during the last 19 years of operation while the net worth of the company is more than 3.5 lakhs Crore rupees.
Another justification the government is giving is that running BSNL is a big drain on the state exchequer. This is a big lie. For the last 19 years, BSNL has been meeting all its expenses entirely from the earnings through its services. For the last 19 years, BSNL has been paying the salaries (which would by now amount to nearly Rs. 1.5 lakh crore) of the 3.25 lakh government employees of the DoT, who were absorbed in BSNL at the time of its formation in October 2000. In addition, BSNL has paid thousands of crores of rupees as spectrum charges, license fee, USO fund contribution, income tax, service tax, GST, pension contribution etc.
As the government prepares for selling off BSNL to private hands, it is doing propaganda that it is not possible to revive BSNL. This is not true. BSNL recorded operational profit for 3 consecutive years in 2014-15, 2015-16 and also in 2016-17, till the entry of Reliance Jio with predatory pricing. If R-Jio had not been allowed by the government to indulge in predatory pricing, BSNL would have become profitable by 2019-20. BSNL, more than other operators, is giving a tough competition to R-Jio. R-Jio’s recently launched Gega fibre plan has become a big failure as FTTH plans of BSNL are 5 times better than the R-Jio offer. BSNL employees are highly talented and very dedicated.
MEL: How will the sale of BSNL to private hands affect the interests of our people, especially in rural and remote areas?
CS: The sale of BSNL to private hands is completely against the interests of our people.
In rural and remote areas of the country, border areas and high-security zones, BSNL is the only reliable service provider. The optical fibre connectivity of BSNL passes through even the furthest corners of India. In the prevailing situation in Jammu and Kashmir, for instance, the government is totally dependent on BSNL landline and mobile for providing services to the government functionaries and security forces in the Kashmir Valley. Almost all security forces, banks, post offices, National Mission projects etc. use BSNL services exclusively.
The entire Bharatnet network and the Digital India project is completely dependent on BSNL. The NFS (Network for Spectrum) project of the Indian armed forces is provided by BSNL. BSNL plays a vital role in providing uninterrupted connectivity to the armed forces.
During natural calamities and other emergency situations, government agencies depend totally on BSNL, whole employees provide services in very difficult situations. Private telecom operators do not operate in these situations as these are not amenable for making big profits.
BSNL also acts as a tariff regulator in the telecom industry. Were it not for the presence of BSNL, the private telecom operators would form their own cartel and greatly raise the charges on incoming and outgoing calls, as used to be case before the entry of BSNL in this sector.
MEL: What is the current situation facing the employees of BSNL?
CS: Payment of salaries to the employees, payment for other work, electricity, rentals, vendors, etc. are all getting delayed. The employees have been bravely continuing their work, out of their commitment to the public, but their patience is running out.
MEL: How will privatisation affect the employees of BSNL?
CS: BSNL has 1.63 lakh regular employees at present. Among these, 38,000 have been directly recruited by BSNL after 2000. They are of the age group 25 to 45. All of them will lose their jobs if BSNL is privatised. There are another 1 lakh contract/casual workers whose livelihood indirectly depends on BSNL. These are workers employed in the hundreds of small enterprises who are supplying material to BSNL.
MEL: What is your course of struggle/action in the coming period?
CS: We have been expecting that by Diwali, the government will propose a plan for revival of BSNL. If this does not happen by that time, then by mid-November, BSNL employees will join hands with MTNL employees, who are also facing the threat of privatisation, and launch various types of agitations.
MEL: The central trade unions have called for an All India protest action on January 8, 2020. The struggle against privatisation of PSUs is an important agenda point in this. Are BSNL employees also preparing to participate in that action?
CS: Historically, the employees of BSNL have been participating in every strike call given by the central trade unions. This time the Officers’ Associations have also declared their intention to participate in the strike. We shall certainly participate vigorously in the strike on January 8, 2020, and express our opposition to the privatisation of BSNL.
MEL: Thank you very much Comrade Sebastin, for bringing out the truth behind the government’s plan to privatise BSNL and its disastrous consequences for our people. We fully support your struggle and wish you all success in forcing the government to withdraw its privatisation plans.