The Hindu Business Line : Communication compromise

The continued uncertainty over the Bharat Sanchar Nigam Ltd tender to expand its capacity is yet another evidence that the public sector’s biggest problem lies within. The Communications Minister must be pleased that at his goading the BSNL board has pruned both the size of the order (from 45 million lines to 23 million) and re-worked the price of certain elements. Exercised that the price of $107 a line arrived at in the long-delayed tender earlier this year was too high, the Minister had threatened not to clear the purchase order. The average price per line has been pruned to around $90, and the overall capital outgo more than halved. However, there are murmurs of another strike by the unions that displayed a rare solidarity with the executives in supporting the full implementation of the tender; they want the original order size maintained. And the BSNL board, which all along felt the tender procedure was correctly followed, has pushed itself to asking the winning bidder for a substantial discount. If the winner does not accede to it, the exercise will be back to square one. In the meantime, BSNL, hamstrung by a capacity shortage, has slipped to the fourth spot among mobile service providers.

The events not only confirm that autonomy in management is still a dream for public sector units but also have dealt a blow to their morale as they bid to compete on level terms with the private sector. How many new lines are to be ordered and whether or when BSNL should equip itself to provide 3G services are clearly matters of business judgment best left to the company, and not issues ordinarily subject to ministerial superintendence. Of course, adherence to well-established tendering norms is another issue, and the contentious exclusion of one of the bidders was fought in court, delaying the process by several months. The new Minister may have his own views on whether BSNL should go in for 3G equipment as the Government has not yet finalised the policy for opening up this next generation mobile service. Yet it is nobody’s case that 3G services will not be introduced. And when they are, should not the public sector service provider also be ready and equipped to offer them to its customers?

With mobile service providers fighting hard to win each one of the five million subscribers who sign on every month, will BSNL not be unduly handicapped if it cannot offer the full repertoire of services? Ironically, the BSNL board’s capitulation to the ministerial intervention came on the day the Prime Minister, Dr Manmohan Singh, was telling a meeting in New Delhi that “rather than interfere and control, Government should be a stakeholder in the functioning of a public enterprise.” Even the Prime Minister, it seems, can only pray for that.

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