BSNL: Rs132 Crore Contract Awarded to BCG To Strategise Revival Roadmap
Moneylife Digital Team 31 May 2024
State-run Bharat Sanchar Nigam Ltd (BSNL) has awarded a Rs132 crore contract to US-based Boston Consulting Group (BCG) to strategise a revival roadmap for the telecom company. However, a union of employees of BSNL has termed the deal as 'futile', says a report from Economic Times.
 
According to the report, under the 34-month deal, BSNL will pay BCG Rs132 crore for its consultancy services. "The expected outcomes include enabling the telco to achieve government-assigned targets by strengthening existing business segments, leveraging emerging technologies, and cost-reduction while significantly improving BSNL's service delivery in line with 'industry benchmarks and best practices', and transforming sales and marketing capabilities," the report says.
 
Quoting from a letter sent by John Verghese, acting general secretary of the BSNL Employees Union (BSNLEU) to BSNL's chairman and managing director (CMD) PK Purwar, the report says, "It is regrettable that BSNL management has resorted to undertaking cosmetic exercises. In the view of BSNLEU, the engaging of BCG is a futile exercise. It has resulted in the unnecessary expenditure of Rs132.16 crore."
 
"This (outsourcing) approach will lead to further wastage of resources and underutilisation of existing manpower," he says.
 
Last year in June, the Union Cabinet approved the third package for BSNL as part of the revival strategy, with a total outlay of Rs89,047 crore. It includes allotment of 4G and 5G spectrum for BSNL through equity infusion. The authorised capital of BSNL, thus, increased to Rs2.10 lakh crore from Rs1.50 lakh crore.
 
With this revival package, BSNL is expected to emerge as a stable telecom service-provider focused on providing connectivity to the remotest parts of India. 
 
However, while most of BSNL's competitors have moved to 5G and are getting ready for 6G, BSNL is still struggling to provide 4G services across the country. 
 
The Indian government approved the first revival package for BSNL and Mahanagar Telephone Nigam Ltd (MTNL) in 2019. It amounted to Rs69,000 crore.
 
In 2022, the government approved the second revival package for both the loss-making entities, amounting to Rs1.64 lakh crore. It provided financial support for capex, viability gap funding for rural landlines, financial support for de-stressing the balance sheet, settlement of adjusted gross revenue (AGR) dues, and the merger of Bharat Broadband Network Ltd (BBNL) with BSNL. As a result of these two packages, BSNL has started earning operating profits since FY21-22. The government says that the total debt of BSNL has reduced from Rs32,944 crore to Rs22,289 crore.
Comments
s5rwav
2 months ago
CMD BSNL Need to Publicly Justify their Corporate Decision.
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