Column : How to fix BSNL

Written by Rachana Khanzode | Updated: Jun 25 2010, 19:11pm hrs
State-owned BSNL might be following the recommendations of the Sam Pitroda committee to rope in an eminent person from the private sector as chairman. The need of the hour for the telecom provider, however, is not just a competent head but a change in its way of operating. BSNL lacks the power to make its own decisions. So, even if Arun Sarin, former CEO of the Vodafone Group, whose name has been doing the rounds as a prospective head of the ailing BSNL, takes over, it would be a challenging situation.

A recent conversation with one of the senior officials at BSNL revealed that the PSU has to go through long procedures of government approvals and tendering, unlike private operators that take decisions independently. This has put a number of projects and contracts that BSNL planned on hold. For example, the project of setting up the 93m line GSM-based network worth $10bn hit a bump with the home ministry raising concerns over security. The project was scrapped almost two years after it came into existence and finally BSNL came out with a short-term project of 5.5m lines in the North and East regions. This official also said the decision on further requirements is yet to be taken.What the government needs to do is provide authority to BSNL and empower the board. Plus, officials need to be accountable and should go through the auditing processes like other private players do, said Brijendra K Syngal, former CMD at VSNL.

Low pay packages are also viewed as a hurdle to BSNLs competency. Arun Sarin has reportedly been offered a salary of Rs 10 crore pa, which is unprecedented in the public sector. Compare it to the current BSNL CMD Kuldeep Goyals take-home packagea little over Rs 12 lakh a year. Considering the increasingly competitive market, the government should look at reducing the excess staffaround 1 lakh peopleand compensate senior executives with better pay packages. Due to the high volume of employees, BSNL saw an increase of about Rs 1,400 crore in expenses, mostly salary compensations, this year. The PSU definitely needs a make-over but it remains to be seen how it survives the winds of change.