Sam Pitroda laid the foundations for India?s much-acclaimed telecom revolution two decades ago. Today, in a transformed environment, he is advisor to the PM on infrastructure, innovation and information technology. Under his stewardship, a committee has laid out how to reform the ailing but able giant BSNL. As our columnist points out, the four-page report is in great contrast to the voluminous tomes that government committees usually dish out. And as Pitroda himself said at the Express Idea Exchange last week, a four-page report is much harder to put together than one that is ten times as long. If the recommendations are executed diligently, this can also lay the foundations for curing other public sector giants that are rich in assets but poor in mobilising them. It looks like the government is moving in this direction, as it has scrapped BSNL?s controversial Rs 35,000-crore tender to procure GSM lines. The Pitroda committee has said, ?Change procurements and procedures substantially to respond to rapidly changing technology and industry needs with necessary transparency, timeliness and accountability using schedules such as e-procurement.? The managed services model is similar to the one already used by private players who outsource their network organisation and minimise capital expenditure.
What used to be the most profitable telecom company in India is looking at losses this fiscal. A key problem has been the political intervention it has attracted. The lines tender is just one such example?with the communications and IT minister first resisting 45 million lines and then becoming all gung-ho about 93 million lines, without giving any explanation for the change of heart. So, as the Pitroda committee has suggested, the heart of the matter is to insulate BSNL from political interference. If the leadership of the company is split into an MD and a CEO, with at least the former being a prominent industry person, we can move towards greater procedural autonomy. Unless this happens, the rest of the recommended reform process is unlikely to take place. Here, we are talking about everything from a 30% disinvestment to monetising assets such as towers and underdeveloped land to encouraging a performance-driven culture (with contracts for all key management employees) and rationalising staff strength?note that the company?s salary bill for the year ending March 2009 was 33% of its total operating revenue as compared to 4.3% for the private telecom operator Bharti Airtel.
