Communications Minister Ravi Shankar Prasad told the Rajya Sabha that the government is taking steps to make BSNL more competitive.

Government considering capital infusion technology upgradation in BSNLImage:
Money Telecom Friday, July 19, 2019 - 11:11
Written by  S. Mahadevan

In a bid to help public sector telecommunications company Bharat Sanchar Nigam Limited (BSNL) survive, the government is planning to take steps to push for technology upgradation and also induct more capital into BSNL in order to make it more competitive.

This was informed to the Rajya Sabha by Communications Minister Ravi Shankar Prasad and Minister of State for Communications, Sanjay Shamrao Dhotre.

There had been reports earlier of the Union Cabinet having approved a proposal to infuse around Rs 74,000 crore into both BSNL and MTNL, the two public sector telecommunications companies in order to revive their fortunes. The report had suggested that there will be a large-scale reduction in the employee strength through golden handshakes. This has however been denied by the Minister in the floor of the house that there is a plan to remove 54,000 employees. That may be neither here nor there. The earlier report would have suggested that the government might put conditions to the PSU to downsize its workforce to be eligible for the fund infusion. The decision might not have been taken.

The Minister did mention in his reply to one of the members that the headcount in BSNL is highly disproportionate when compared to the private players. The public sector telecom company spends up to 75% on paying salaries, which is way above what the private sector companies incur. These are legacy issues and the government has to bite the bullet if the telecom company is to survive. Its market share is currently around 10%. The most popular 4G service is not yet part of the offerings by BSNL. It has now been announced that the 4G service will be introduced with the funds to be sanctioned by the government. The funds may be in the form of equity infusion in BSNL even. 

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