THE government has once again tom-tommed that it would be spending Rs 1.64 lakh crore to revive BSNL. This second revival package was announced on July 27, 2022. The government had already announced a similar revival package for BSNL and MTNL on October 23, 2019, in which the government had promised to spend Rs 70,000 crore for the revival of both the public sector telecom companies. A loud message is being sent to the general public of this country that the government is squandering a huge amount of tax payers’ money, for the so called revival of BSNL. Exactly, how much the government is spending from the tax payers’ money to revive BSNL? Let us see.

An important component of the revival packages is the allotment of 4G spectrum to BSNL. It is important to note that, in the first revival package announced on October 23, 2019, the government had promised to spend Rs 23,814 crore for the allotment of 4G spectrum to BSNL. Again, in February, 2022, the finance minister announced in her budget speech that Rs 44,000 crore would be spent for BSNL’s ‘technology upgradation’. Now, in the second revival package, it is again stated that the government would spend Rs 44,993 crore for the allotment of 4G spectrum to BSNL. If we put together all these amounts, it comes to a staggering Rs 1,12,807 crore.

The people of this country will be amused to know that despite all the tall claims being made by the government, BSNL has not been able to launch its 4G service till today. The first revival package announced by the government on October 23, 2019, remains only on paper. The only thing that the government has done based on the first revival package is, retrenching a massive 80,000 employees through the VRS. The most important commitment of allotting 4G spectrum to BSNL remains only on paper.

To stop BSNL from launching its 4G service, the government has created two big road-blocks. The first road-block was the denial of permission for the upgradation of BSNL’s already existing equipments. BSNL is having 49,300 3G BTSs, which could have been converted into 4G BTSs, through software upgradation. But the government denied permission for this. Had this upgradation been allowed, BSNL could have launched its 4G service at the pan-India level, at least two years back.

The next road-block created by the government is the denial of permission to BSNL, for procuring its 4G equipments from global vendors, as is being done by the other private telecom operators, viz., Airtel, Reliance Jio and Vodafone Idea. In March 2020, BSNL floated a tender to procure 50,000 4G BTSs. However, the government forced BSNL to cancel this tender and directed that BSNL should procure its 4G equipments only from Indian vendors and not from global vendors. Thereafter, TCS was identified for the supply 4G equipments to BSNL. But, till date, TCS has not been able to prove that it is having the requisite technology to supply 4G equipments to BSNL. No one knows when TCS will be able to supply 4G equipments to BSNL!

Today, even for the launching of their 5G service, all the private telecom companies have taken steps to procure their equipments from global vendors, viz., Nokia, Ericsson and Samsung. Thus, it becomes clear that the denial of level playing ground to BSNL has been done intentionally by the government, to stop BSNL from launching its 4G service. In the telecommunication sector, technology changes fast. Unless BSNL upgrades its technology on time, it will be difficult for it to compete with private telecom companies. At a time when all the private telecom companies are launching their 5G service, nothing is mentioned in the revival package about BSNL’s 5G service. 

It is stated in the revival package that the government would pay Rs 22,471 crore to BSNL over a period of four years for the capital expenditure of the company. It is pertinent to mention here that the repayment of Rs 38,540 crore to BSNL by the government has become overdue. BSNL has already made its claim to the DoT. The unions and associations of BSNL have organised many agitations demanding repayment of this amount to BSNL. It must be noted that the Rs 22,471 crore assured to be paid to BSNL is much lesser then the dues that the government actually has to repay to BSNL.   

It is also mentioned in the revival package that the government would provide Rs 13,789 crore to BSNL as “Viability Gap Funding”. What is this "Viability Gap Funding? BSNL is providing services on behalf of the Government of India, in the backward and far-flung areas of the country. These services are commercially unviable for BSNL. Hence, whatever loss incurred by BSNL in providing these services, has to be compensated by the government. BSNL has already placed its claim to the government a couple of years ago, for the repayment of Rs 13,789 crore. The unions and associations have conducted many agitations demanding repayment of this amount. Now, repayment of this amount is being projected as a dole to BSNL, under the revival package.

As per the revival package, the government’s optic fibre company, BBNL, would be merged with BSNL. Again this is nothing but misleading. It is clearly stated that, the ownership of BBNL will continue to remain with the government and that, all the private companies can also use the optic fibre of BBNL. In reality, only the operation and maintenance of BBNL has been handed over to BSNL. The government is keeping its doors wide open, for handing over BBNL to private entities in future.

Year after year, the government is fleecing extra money from BSNL in the name of payment of ‘pension contribution’. This is an important factor which is impacting the financial condition of BSNL. The employees absorbed in BSNL from the DoT are entitled for government pension, for which BSNL has to pay pension contribution to the government every year. This pension contribution is being calculated on the maximum of the pay scale of BSNL employees, whereas in the case of the rest of the central government employees, the pension contribution is being collected, on the actual basic pay. The unions and associations are continuously demanding that the fleecing of extra money from BSNL in the name of pension contribution should be stopped and that the money already collected in excess should be refunded to BSNL. Nothing is mentioned in the revival package about this.    

As per the revival package, the government will give sovereign guarantee to BSNL to raise Rs 40,399 crore through bonds to be issued in the market. This will help the company to overcome its financial crisis. At the same time, it is also relevant to mention that this entire Rs 40,399 crore and the interest thereon will be repaid by BSNL and it is not going to be repaid with the tax payers’ money.

It is clear from all this that the government is not going to spend anything from the tax payers’ money for the revival of BSNL. At the same time, what is announced on July 27, 2022, is being termed as a “perform or perish” revival package, by the government. The prime minister has reportedly told that BSNL will face closure if it fails to perform. On the one side, government is making tall claims about BSNL’s revival. On the other side, it is creating road-blocks to BSNL’s upgradation of technology. This clearly indicates that the government is having its hidden agenda for BSNL.