The Cabinet’s decision to provide a ₹1.64 lakh crore lifeline to Bharat Sanchar Nigam Ltd. comes as a badly needed shot in the arm for the loss-making public sector telecommunications provider. Almost three years since the Government last announced a plan to revive BSNL and its smaller peer Mahanagar Telephone Nigam Ltd. (MTNL), the Government seems to have belatedly realised that any further delay in adequately funding the main public sector telco in the “strategic sector” risks compromising its goals of bridging the digital divide and ensuring the evolution of an inclusive knowledge society. Nothing highlights the urgency of providing the crucial capital support to address the multiple financial, technology and spectrum needs confronting the erstwhile monopoly provider of telecommunication services than the accelerated erosion in its subscriber base in the 31 months since October 2019, when the earlier revival plan was approved. For a company that held the commanding heights of landline (wireline) connections until the opening up of the sector to private players and entry of wireless telephony in the 1990s, BSNL’s share of wireline connections fell sharply to 28.7% at the end of May 2022, from 46.6% in October 2019. Over the same period, the total number of wireline connections grew 17.6% to 2.52 crore. On the significantly larger wireless front, BSNL’s already small share slid marginally to 9.85% as on May 31, with the number of subscribers declining by 45 lakh to 11.28 crore. The only consolation was that the number of its rural wireless subscribers shrank by just 11.4 lakh, reflecting both the ubiquitousness of its network in the hinterland and far-flung outposts in key border areas, and the relatively greater loyalty it commands in the countryside.
The intervening period has also seen BSNL shrink its workforce, making it a far lighter ship and better placed to navigate the shoals of a competitive, and technologically rapidly evolving marketplace. From an employee base that exceeded 1.65 lakh, and consumed about 75% of its total income, the public sector enterprise had whittled down the number of regular employees on its rolls to 64,536 as on March 31, 2021, with the proportion of employee benefit expenses to total income more than halving to 36%. BSNL’s net loss also narrowed appreciably to ₹7,453 crore at the end of the fiscal year ended March 2021. Acknowledging the public sector telco’s “crucial role in expansion of telecom services in rural areas, development of indigenous technology and disaster relief”, the Government has earmarked welcome funds for each of the chosen focus areas including allocating spectrum, helping the provider upgrade its services and critically de-stressing its balance sheet. The coming months will test the commitment and resolve of the Government and the BSNL management in marshalling the resources in a timely manner given how crucial the state-owned company is to the overall health of the industry as a ‘market balancer’.
