Government detects ills plaguing BSNL, to give full support for its revival

Telecom minister Prasad 

AFTER completing two months in office the NDA government has made its stance clear vis-a-vis the PSUs. The initial euphoria that the new Narendra Modi-led NDA government will take steps for reviving the ailing PSUs has died down. Now, it seems clear that the government is in no mood to revive...

the loss making PSUs. Earlier, sending a stern signal to the ailing public sector enterprises, the finance minister categorically told them to either shape up or shut down. Jaitley has asked them learn the trade secrets to deal with free competition in an era when state-run firms had lost monopoly rights and preference, which marked a clear-cut shift in the Centre's policy.    

However, in case of some PSUs, where there is a possibility of revival, the government is not shying away its responsibility. Reiterating his pledge to revive state-owned BSNL, telecom minister Ravi Shankar Prasad said the government will provide full support to the state-owned telecom giant to help regain its past glory. BSNL, which was formed in 2000, was in the recent years facing financial strain but lost to competition because of inadequate investment in infrastructure expansion that ought to have been provided during past few years.

The minister said low investment in the telecom PSU, high employee cost and poor perception of quality of service provided are the three main reasons for the PSU turning red in the financial market.

"Government is committed to the revival of BSNL...I want to assure the House that BSNL will not be allowed to die," he said. The firm's market share has dipped from 15.66 per cent as on March 31, 2010 to 11.70 as on May 31, 2014. The minister said BSNL slipped because of "inadequate investment in infrastructure expansion in recent years leading to delay in expansion of mobile network" and the company was also made to pay "market rate (of Rs 18,500.38 crore) for both 3G and broadband wireless access (BWA) spectrum". High employee cost and poor perception of quality of service provided by BSNL too impacted profitability, the minister said. His assurance comes at a time when the BSNL’s market share slipped from 15.66 percent in 2010 to 11.70 percent on May 31, 2014. Government has taken different measures such as waiver of Rs 1,411 crore government loan to BSNL and return of Rs 6,724.51 crore for surrendering the BWA spectrum.

BSNL is migrating from Public Switched Telephone Network (PSTN) to Next Generation Network (NGN) to provide enhanced value added services like personalised ring back tone, broadband, multi media video conferencing, Voice over Internet Protocol (VOIP) services and fixed-mobile service convergence.

In a related development, the government has identified three sick PSUs which will be either merged or taken over by SAIL, BHEL and HMT. The three sick PSUs are Praga Tools Ltd, Bharat Heavy Plates Vessels Ltd and Bharat Refractories Ltd, minister of state for finance Nirmala Sitharaman said in a written reply in Lok Sabha.  Hindustan Machine Tools (HMT), Bharat Heavy Electricals Ltd (BHEL) and Steel Authority of India Ltd (SAIL) have been identified to take over the above mentioned three PSUs. "On the recommendation of the Board for Reconstruction of Public Sector Enterprises (BRPSE), concerned administrative ministries/departments have taken approval of the competent authority for the mergers/takeovers," she added.