Revival package for BSNL welcome

The government’s recently announced Rs 1.64 lakh crore package to revive the public sector telecom company Bharat Sanchar Nigam Ltd (BSNL) is a welcome plan.

It is ambitious, considering the dire financial straits the company is in now. It aims to turn BSNL profitable by 2026-27. The package should actually have come earlier. The government had approved a Rs 74,000-crore package in 2019.

It had some impact as the economy measures and debt restructuring plans that formed the package benefitted BSNL and may have stabilised it. But it needs more support. BSNL has been steadily losing customers over the years. It has only 25 million broadband subscribers while Reliance Jio Infocomm has 414 million, Airtel 217 million and Vodafone Idea 123 million subscribers. Its total losses in the last three years amount to almost Rs 30,000 crore. Annual losses were reduced from Rs 13,804 crore in 2018-19 to Rs 7,453 crore in 2020-21 but it is still a big drain on the public exchequer.

BSNL needs to be supported because it operates in a strategic sector where government presence is needed. A stronger BSNL is needed to ensure better competition in the sector, which is a virtual duopoly now, and to bridge the digital divide in the country. It still has a substantial subscriber base in rural and remote areas where the private operators are reluctant to go. It has millions of internet users in rural areas but this is much less than the potential rural connectivity.

It has plans to implement its ambitious BharatNet project by 2025. The revival package aims to merge Bharat Broadband Network Ltd, which created the BharatNet fibre network, with BSNL. It will provide broadband connectivity to all gram panchayats and bring all remote and inaccessible areas, including Maoist-infested areas, within broadband coverage.

The government’s package is in two parts. It has a cash component of Rs 43,964 crore and a non-cash component of Rs 1.2 lakh crore spread over four years. The funds are to be used to upgrade services, allocate spectrum, de-stress the balance sheet and augment the fibre network. The challenge is to make the best use of the resources and improve the working of the company. It should be managed professionally and needs better technological support to improve its services. It has reduced its workforce from 165,000 to 64,536 but with the attenuated staff strength it will need upgradation of technologies. But BSNL is only now moving into 4G services when others are set to launch 5G. At this stage it is difficult to imagine that BSNL will present any great financial performance in the near future, but it needs to be supported.