BSNL Can Be Shut Down Over Mounting Losses; Private Players Can Be Asked To Run It

BSNL's losses have now become unmanageable for the Govt.

BSNL can be closed down?
BSNL can be closed down?

This is BSNL’s darkest hour, ever. State-run telecom carrier BSNL can be closed down by the Govt., in case losses doesn’t stop. Among other plans, disinvestment has also been suggested, which will allow private players to run the company.

Will BSNL survive?

BSNL Shutdown?

BSNL’s total losses have now reached Rs 31,287 crore, at the end of 2017-18. And this has unsettled the Govt., and making them anxious.

Govt. has asked BSNL to prepare a ‘survival report’ now, wherein they have been asked to suggest ways which will help them to revive, and become profitable again.

Closure or shutting down the entire telecom company has also been suggested by the Govt.

An unnamed source has claimed that BSNL has been asked to create “comparative analysis of all options available with the government, i.e. strategic disinvestment of BSNL, closure or revival with financial support”

Hence, as we can see, Govt. is considering three options for BSNL now:

  • Closure, which will shut down BSNL and all its operations.
  • Strategic disinvestment, which will allow the entry of private players in running BSNL
  • Infusion of more funds from the Govt. to sustain operations.

As of now, option 3 is the main strategy of the Govt., as thousands of crores of losses are absorbed every year.

But now, it seems that the strategy will change.

BSNL MD Anupam Shrivastava has already met telecom secretary Aruna Sundararajan, and shared a presentation on the way forward. It is not yet clear, whether the option to shut down BSNL was mentioned or not.

As per reports, the entry of Jio and its effect on the entire telecom industry in India was mentioned in the presentation.

After Jio’s tsunami hit India, more than 30,000 telecom employees have lost job, and companies like Unior, Aircel, Tata Teleservices etc have shut their shops.

BSNL’s Desperate Attempt To Survive

Few days back, we had reported that BSNL may terminate 35,000 employees, as it desperately attempts to survive in the post-Jio world. New schemes and plans are being introduced, whose only is to save money, and help BSNL to stand on its own feet.

Besides terminating 35,000 employees, and giving them VRS option, BSNL has also frozen most of the employee benefits such as travel allowance and even reduced medical allowance.

Some of the other options which are being considered to save BSNL:

  • Reduce the retirement age of BSNL employees from 60 years to 58 years. Upto Rs 3000 crore can be saved per year, if this happens right now.
  • Forced VRS for 35,000 employees, which will incur expenses of Rs 13,000 crore initially, but can save money in the longer run. Rs 15,000 crore is the basic expense required by BSNL to pay salaries and support employee benefits.
  • BSNL has several old buildings and real estate, whose value is expected to be Rs 15,000 crore. These can be utilized for generating new income sources. Department of Investment and Public Asset Management (DIPAM) can be contacted for the same, and some concrete decisions can be taken soon.

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