BSNL Shutdown will Cause Digital Tsunami

Islamul Haque Mandal

[The writer is Joint Secretary (Eastern Region),

Sanchar Nigam Executives’ Association (SNEA). He can be contacted at mobile phone 94350-00076 and e-mail: ihmandal76@gmail.com]

India’s telecom industry is passing through a very difficult phase, just like a directionless ship in a stormy sea. Presently, almost every person in the country owns a mobile phone. If the government does not enforce rules strictly and a well-thought mechanism is not put in place, the country will face digital tsunami in the days to come. There are many reasons for this apprehension and only a few are mentioned in this article for the interest of telecom users.

Firstly, on October 1, 2000, the then NDA government created Bharat Sanchar Nigam Limited (BSNL) as a Central PSU by carving out telecom operations from the Department of Telecommunications (DOT) in the spirit of 1999 Telecom Policy and thereby about 3 lakh DOT employees were absorbed in the new entity. The main aim was to allow private telecom operators, to develop a competitive atmosphere in a level playing field and thereby create telecom revolution in the country. But right from the beginning, the government was inclined towards private operators and during the first four years, BSNL was not even allowed to provide mobile services. This gave an opportunity to private operators, especially Reliance Communications, to earn huge profits by providing services at exorbitant rates to the tune of Rs 15 to Rs 20 per minute for outgoing calls and even Rs 5 to Rs 8 per minute against incoming calls. After that BSNL was allowed to offer mobile service and the rates came down drastically to the minimum with incoming calls becoming completely free. Since then both UPA and NDA governments did everything possible and tied the hands of BSNL to make the PSU weaker day by day.

Today the telecom tariffs in India are the lowest compared to any country in the globe. This has become possible only because of the presence of BSNL and MTNL (the latter operates in Delhi and Mumbai only) which work for the nation and not for earning profits. If these Central PSUs are shut down, the tariffs will shoot up to not less than ten times of today’s tariffs. A person spending only Rs 150 per month for both voice and internet data services will have to pay out at least Rs 1,500 for the same period and as a result 50 percent of the total 120 crore mobile subscribers will be forced to either quit or to satisfy themselves with voice calls only. This will have a negative impact on Digital India programme too.

Secondly, the rate race in the telecom industry is going to take its toll on the banking sector also. Reserve Bank of India had earlier fixed a cap of Rs 5 lakh crore as loan for the telecom sector and this limit was maintained till the entry of Reliance Jio in the market in 2016. After its big bang launch using the photograph of none other than the Hon’ble Prime Minister on front page of every newspaper throughout the country on September 5, 2016, and only in order to extend bank loan to Reliance Jio, this cap on upper limit was violated. Moreover, after getting a huge bank loan of Rs 1 lakh 12 thousand crore, Reliance Jio created an unprecedented situation in the telecom sector. The company started giving service free of cost beyond promotional period at its whim and fancy, violating all rules of fair competition and then continued to provide services through predatory pricing (it is a price less than the production cost of a particular service) and both the Telecom Regulatory Authority of India (TRAI) and the government remained mute spectators. It is relevant to mention here that the new entrant was not providing services at rock bottom rates just to serve the nation, but its sole aim was to kill all competitors and then enjoy monopoly in the sector to loot the public in the long run.

The result was clearly visible. There were more than a dozen telecom operators at the time of entry of Reliance Jio in 2016. But due to such illegal operation of Reliance Jio, the number of operators came down to four. Vodafone India and Idea Cellular could not stand alone and merged to form Vodafone Idea Ltd in 2018. Videocon sold its spectrum and left the market in 2016, MTS India got sold to Anil Ambani’s Reliance Communication in 2017, Telenor India and Tata Docomo closed their independent shops and merged with Bharati Airtel in 2018 and 2019 respectively. Aircel and Reliance Communication were unable to run their business and pay back bank loans and had to go bankrupt. Till date, the bank loan (excluding interest) against Vodafone Idea Ltd is Rs 1 lakh 18 thousand crore, loan of Bharati Airtel is Rs 1 lakh 8 thousand crore, against Reliance Jio it is Rs 1 lakh 12 thousand crore and the loan against BSNL is only Rs 20 thousand crore. Although there is huge demand for telecom services in the country, all the four operators are incurring losses to the tune of several thousand crore rupees each. Now the bigger question is whether the banks will be able to recover the total loans to the tune of more than Rs 6 lakh crore from the existing private operators which are running at huge losses or from those who have already left the market. What is going to be its impact on country’s economy?

Thirdly, in addition to the use of telecom facilities at individual levels, it is now inevitable in general administration, national security, business, banking, education, disaster management, space research, space missions etc. Therefore, it is necessary that the government has one organization of its own to ensure data security for all such operations and financial transactions. Without data security, there will be utter chaos at every step. But unfortunately BSNL has been experiencing step-motherly attitude from the government right from its birth. Not to speak of financial support, the government is not allotting 4G spectrum to its own company and even siphoning out huge amount from BSNL in the name of pension contribution violating the existing norms. Readers will be surprised to know that BSNL executives are spending money from their pockets to tide over the financial crisis and maintain services. We all know that BSNL owns land having value of Rs 3 lakh crore, 66 thousand mobile towers, 8 lakh kms optical fibre network, running 17,000 loss making rural exchanges just for supporting Digital India programme, 3,000 kms of digital microwave network, more than 100 satellite earth stations etc. With such a huge public asset and well trained technical manpower, BSNL is self-sufficient to face any challenge. But the government is yet to take a bold decision to ensure that its own company survives with full strength for the interest of the nation. On October 3 last, the government has taken a short term measure including Voluntary Retirement Scheme (VRS) to revive BSNL and the same is expected to be approved by the Cabinet before Deepawali. The government should take all necessary steps before it is too late to run BSNL with full strength. This is the need of the hour.