The move comes on the eve of a strike by BSNL employee unions against the Pitroda panel recommendations.
The Department of Telecommunications (DoT) has proposed postponing the disinvestment plan of state-run telecom major Bharat Sanchar Nigam Ltd (BSNL).
This comes on the eve of a strike by BSNL employee unions against the Pitroda recommendations.
The department is of the view that the disinvestment of 30 per cent of equity shareholding of BSNL in phases, as recommended by the Sam Pitroda committee, should be done only after enhancing the PSU’s enterprise value and image.
“In accordance with the recommendations of the Pitroda committee, it is proposed to wait for the fundamental changes to be implemented in an effective manner, leading to building of the company’s image and enhancement of enterprise value before implementation of disinvestment proposal,” DoT said in a note to its policy wing, the Telecom Commission, which would take a final view on this matter.
The Pitroda committee, formed to look into ways to revive BSNL, had recommended a sweeping restructuring of the organisation, which would involve reduction of the 3,50,000 work force by 1,00,000 through a Voluntary Retirement Scheme.
It also suggested appointment of senior people in the company’s management from the private sector, besides suggesting BSNL scrap the existing 93-million GSM line order and go for an outsourcing of network management, followed by other competing private sector telecom companies like Bharti Airtel.
The BSNL board had accepted all these recommendations, but DoT needs to agree.
However, DoT has accepted the committee’s recommendations of hiving off a separate subsidiary for BSNL’s tower business and another one to hold lits and bank and other real estate assets. BSNL has already started the process of hiving off its tower business as a separate entity.
For developing the land bank and monetising the real estate assets, an exercise is going on for retention of certain assets by DoT for its field units and transferring the rest to BSNL. The transfer agreement would be completed in six months, DoT said.
Due to the increased competition in the sector, BSNL’s market share has come down to 12 per cent. BSNL, which was giving tough competition to market leader Bharti Airtel about two to three years earlier, has slipped to fifth position.
The company is expected to make losses in 2009-10 for the first time, of about Rs 2,600 crore. For the nine months ended December, it made profit of just Rs 150 crore, but has to pay over Rs 3,000 crore as arrears of wages.
