BSNL has come down hard on media reports that suggested that the government is exploring the closure of the telecom PSU as it continues to be in the red. A statement from the telco reads, “DoT is considering the revival of BSNL. Recently, the government has asked BSNL to do a comparative analysis of various options including strategic disinvestment, closure or revival with financial support, to address its precarious financial situation.”
For the record, BSNL has been suffering losses since 2009. During 2017-18, BSNL’s losses stood at Rs 79.92 billion, taking its total accumulated losses to a whopping Rs 312.87 billion.
In the past many years, there have been several instances when the government has thrown its weight behind BSNL and reiterated its confidence in the telco’s revival. Even in its quest for a perfect market structure for the telecom industry, the government has always talked about a 3+1 player market. While the government’s intent of revitalising its ailing telecom arm is encouraging, there has been limited on-the-ground action to support it.
In a market where private telcos are firming up their 5G strategies, BSNL is still awaiting the cabinet’s approval for spectrum allocation to launch 4G services. The Digital Communications Commission has recently decided to seek TRAI’s views on the administrative allocation, quantum, price and appropriate frequency band for allocating 4G spectrum to BSNL. Further action will only be taken once TRAI’s views are received. Every delay on this front is pushing BSNL further back in the 4G race.
Similarly, several of the government’s ambitious telecom connectivity projects, as in the Northeast and in areas affected by left wing extremism, have faced delays in approvals by DoT. A timely start to these projects could have boosted the telco’s revenues in a big way.
Clearly, it is time that the government took decisive action on BSNL – revive it or close it down forever.