Identified challenges in revival
The challenges facing BSNL can be classified into three major heads:
1. Technological/ market:
These include the rapid evolution of technology (5G, IOT), fast evolving consumer needs of data consumption, changing demographics patterns and increasing role of content in driving businesses. Such a combination of technology/market characteristics requires organisations to have agility, build partnerships, reduce costs, and be innovative. On all these dimensions BSNL has significant challenges. The mechanism for responding to the challenges is not elaborated as it is included in the part on organisational challenges.
2. Policy environment:
Since BSNL is 100 per cent government owned, it is often subject to the delays and decisions made by the government. For example, while the government has transferred its liabilities (workforce) to BSNL, the transfer of land and building assets are yet to be completed. There seems to be a lot of confusion surrounding the ownership of the land and building assets of BSNL.
These are specific to the systems and processes adopted by BSNL. These relate to delays in procurement due to its own inefficiencies and the need to follow guidelines for public procurement; centralization of deployment of tariff plans, leading to inflexibility in service offerings; poor linkage of performance with incentives, frequent transfers etc. The larger challenges relate to developing organizational responses on rapid developments in the sector, building partnerships, enhanced marketing orientation. Challenges being faced in those categories where BSNL/DoT could take action.
a. Delay in allocation of 4G spectrum as outlined in Part B.
b. Lack of a separate project organisation: BSNL operates as a single entity under a UAS License: All telecom service operators have to pay 8 per cent revenue share from all activities that occur under the UAS License.
BSNL’s bid for projects, including those that do not explicitly involve telecom services is higher due to the revenue share. This makes its bid uncompetitive. In comparison, other operators have set up subsidiaries that can undertake such projects, and thus there is no mandate of revenue share.
c. Flux in the decision regarding MTNL: MTNL serves the national capital region and Mumbai. BSNL serves the rest of the country. All telecom service providers have pan-India presence and earn about 40-50 per cent of the revenues and 30-40 per cent profit from these two metropolitan cities. However, despite this, MTNL has been suffering mounting losses.
The operation of BSNL and MTNL as two separate entities is economically, operationally and financially sub-optimal.
d. Delays in project allotment and project funding: The project allotment may get stuck due to bureaucratic procedures and processes, and also delays in decision-making. Often times, lack of clarity of criteria on which to base decision is missing.
Also, at time the payments for the approved and completed projects is delayed by DoT. The delays in allotment of projects and the payments from DoT leads to avoidable demotivation and financial loss for BSNL.
e. Removing market/financial inefficiency: At present, BSNL is 100 per cent government entity. In order to infuse capital and also to bring in market/financial efficiency, it may be important to think about listing of BSNL (like other PSUs such as ONGC, GAIL, NTPC, etc.).
a. Large legacy workforce: BSNL has a huge legacy workforce. Workforce of BSNL is 1,71,523. Majority (about 70 per cent) of this workforce was transferred to BSNL from DoT at the time of formation of BSNL.
The workforce of BSNL has an average age of more than 55 years (especially in the group C and D field staff). This workforce lacks interest in improvement of services, providing good quality customer service and even lacks technical knowledge.
b. The board: There have been concerns about the Board composition and representation from the business fraternity. Also top and Board positions often go vacant for long periods of time. The middle level management is dominated by executives promoted from JEs/JTOs who were absorbed/transferred to BSNL at the time of its formation. These professionals are mostly above 55 years of age and have very little motivation to improve the condition of BSNL.
c. Centralised structure – Important activities like procurement of equipment, handling of finances, preparation of tariff plans, recruitment, etc. are done centrally through the BSNL headquarters. The circle heads (CGM and PGM) are not empowered to make decisions regarding the abovementioned issues by themselves.
d. Lack of well-thought out policies and systems: Even after about 19 years of existence, BSNL does not have well thought out people-related policies. Some of the important policies such as the ones mentioned below are missing:
i. Performance management and promotion policy – The performance management system in BSNL is quite superficial. The promotion happens in a time-bound manner and there is no recognition of merit in the system. Today, mediocre people are holding important positions. There is lack of professional leadership in the organisation.
ii. Manpower planning and recruitment – There is no serious manpower planning that has happened in the organization since the time it was found. The recruitment has happened over the years in a very ad hoc manner at both the headquarter as well as the circle level.
iii. Different cadres in the organisation – People hired at the same level job titles have been given different job designations.
iv. Shutting down of small exchanges – There are a lot of exchanges that are unviable due to low number of connection but are still being maintained/operated by BSNL. There is no clear policy/decision being taken by the headquarters about shutting down of these unviable exchanges.
e. Lack of Customer Orientation – There is tremendous demotivation in the BSNL workforce due to the poor performance of the PSU, illthought policies, lack of commitment of the leadership, aging workforce, non-implementation of 3rd PRC and suspension of staff amenities and other dues like the reimbursement of medical bills, LTC, etc.
This lack of enthusiasm has transferred into poor customer service leading to a reduction in customer connections over time.