BSNL Revamp: Government mulls network upgrade, cost cuts to boost competitiveness

BSNL Revamp: In an attempt to provide an impetus to the state-run telecom operator Bharat Sanchar Nigam Limited (BSNL) to compete effectively with private players, the government is exploring various measures, including network upgrades and employee cost rationalisation, according to a report by Economic Times.

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The recommended initiatives also include improving sales and distribution channels along with introducing more value-added services (VAS), sources said, as per the report. The move is expected to streamline expenses, particularly employee benefit costs, and is deemed crucial for the struggling BSNL to level the playing field with its private competitors, as emphasised by the sources in the report.

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“We have to benchmark employee expenses with other telecom operators,” one of the officials said, as quoted by Economic Times.

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Despite slashing the workforce through voluntary retirement schemes since 2019, employee costs remain a major hurdle for BSNL. As of FY23, staff expenses account for a substantial 38.4 per cent of the company’s total revenue, according to officials, the report further added. This figure, a second official noted is significantly higher compared to private telecom operators in the country.

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Mint earlier reported that Bharat Sanchar Nigam Ltd’s pan-India 4G service launch will get pushed to December 2024 due to delays by vendor Tata Consultancy Services Ltd (TCS) to install 4G equipment, its management told the employees’ union last week, prompting the state-run telecom operator’s workers to ask the Centre to allow the company to temporarily use rival Vodafone Idea’s 4G network.

In a letter to telecom minister Ashwini Vaishnaw, BSNL’s employees' union asked the government to permit the use of Vodafone Idea’s 4G network on the grounds that the Centre is the largest shareholder in the debt-laden company, and the measure could help BSNL stop the exodus of customers and turn the carrier around, at a time when rivals Reliance Jio and Bharti Airtel have started pan-India 5G services.