How BSNL can step up its game to survive

Thomas K Thomas | Updated on October 26, 2019

Pumping in taxpayers’ money to revive the struggling PSU will be meaningless without a plan to compete for customers

Employees of Bharat Sanchar Nigam Ltd (BSNL) are in a self-congratulatory mode, claiming credit for convincing the Centre to embark on a ₹70,000-crore revival plan. But no revival plan can succeed by just pumping in money. If BSNL wants to survive in a highly competitive telecom sector, it needs to quickly put in place a turnaround strategy. In the past too, the Centre has given financial aid to BSNL in the form of refunds on spectrum payments, soft loans, and grants to keep the struggling public sector company afloat.

But all this financial support over the years has not helped BSNL to do one thing that it needs to do: compete for customers with the likes of Airtel and Reliance Jio.

This is going to be the biggest challenge for an organisation that has layers of bureaucratic decision-making apparatus and a culture that does not put customers at the centre.

Entering the digital race

The new paradigm in telecom is data; and here, whoever gives the best experience will emerge winner. This experience is driven by device, content, access, application, storage and security. This is a world that will survive on millennial consumption, who would be a large part of the market. They have a way of assessing brands.

In this digital world, operators who are quick to understand consumer demands and nimbly cater to them will win. Operators such as Reliance Jio understand this well, and have put together an ecosystem to succeed. In contrast, BSNL clearly does not qualify to get into the new-age consumer mindset. The entire DNA of the public sector is not geared towards consumer delight. This needs to change, and that can happen only if there is a cultural shift within the organisation.

Change in governance

The other major area for BSNL to work on is its governance. Baring a few exceptions, most of the leadership team at BSNL has lacked vision. The PSU still buys equipment through tenders where the lowest bidder wins. The best vendors in technology are not the cheapest. In 2009, BSNL was the only operator to be given broadband spectrum, and it decided to deploy a relatively new technology called WiMax while the entire world was moving towards Long Term Evolution (LTE), now the global standard for 4G services. During the tendering process, the project managers at BSNL short-listed five companies, all of whom had the same contact details, email ids and phone numbers. Anyone with little intelligence would have known that the bids had a scam written all over them, but it was only after some vigilant employees protested that the entire tender process was scrapped.

Another tender was floated in 2010, but this too was scrapped after allegations that some of the franchisee partners to whom the contracts were being awarded existed only on paper. By 2011, it was evident that BSNL had picked the wrong technology, and so the entire spectrum was given back to the government without launching any service.

A few years ago, when this writer visited Sanchar Bhawan — the building that houses the telecom department — the then Chairman of BSNL was found waiting outside the office of a high-ranking bureaucrat. The Chairman had been waiting for over an hour just to get a sign-off on a file related to a key decision that had to be implemented the same day. After waiting for nearly two hours, the Chairman was told to come back the next day. If BSNL wants to succeed, then it needs leaders with integrity who can establish transparent and effective governance policies. The Centre should also allow such leaders to be independent and take strategic decisions to transform the company.

The third area of focus has to be rationalising the employee base. BSNL, with over one lakh employees, cannot compete with private players who are already 10 times bigger but have less than 10,000 employees. Employees who cannot align with the new realities of the telecom world need to exit. Marketing executives who cannot think of a customer-centric approach, technicians, and engineers who cannot innovate for the future, staff who are occupying redundant positions and top executives who cannot steer the company’s turnaround plan have no place. Such employees should be given a generous voluntary retirement scheme. If BSNL wants to compete with private players, it needs to start thinking like a private company.

New opportunities

Although BSNL may have lost a lot of ground, it still has the opportunity to bounce back with newer technologies coming in. It can play a huge role in 5G, for example, offering connected services for not just people but also machines. Reliance Jio, for instance, has been able to establish itself as the number one data player with 4G, even though it missed out on 2G and 3G services. If BSNL wants to survive, then it will have to do what RJio did. It’s a tall order, but not impossible.

The telecom industry across the world is consolidating into three players — the first operator makes money, the second player is on the brink and the third loses money. There is no space for a fourth player. The Centre should make it clear that the proposed package is the last parachute it will offer. If BSNL does not want to crash-land, it has to get its act together, or else even this revival package will be a case of good money chasing bad money.

Instead of getting caught in the pincers of adverse trends and massive legacy problems, BSNL should focus on the real opportunity to turn around its fortunes. Once that’s done, the employees can congratulate each other heartily.

Published on October 25, 2019

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