People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 05

February 04, 2008


BSNL Workers On Struggle

Against Disinvestment

Indefinite Strike From Feb 26


V A N Namboodiri


THE announcement by the minister of Communications & IT, A Raja, on January 14, 2008, that the government is proposing to divest 10 percent equity in BSNL through IPO route, was not unexpected. However, announcing the same to the press in a secret way on the sidelines of the function of launching the Free Accident Insurance Scheme for the subscribers of BSNL, in which the representatives of the Unions were also present, smacked of conspiracy and mischief. It seems that the intention was to convey to the public that the unions are in support of the same.


The government has been toying with this idea ever since BSNL was converted as a PSU from the earlier Department of Telecommunications. In fact, the main hidden agenda for corporatisation of DOT itself was disinvestment and privatisation of this mega telecom company having a profit of thousands of crores of rupees. The NDA government had brought the then Disinvestment minister, Arun Shourie, as the minister of Communications for this specific purpose. However, the declaration of general elections temporarily put the scheme under carpet.


Disinvestment of BSNL along with many other PSUs was a priority with the UPA government also. However, due to the strong opposition from the Left parties, the government had to agree that profitable PSUs would not be privatised. The strong reaction of the state governments and the people of the concerned states as also opposition from the workers compelled the government to drop its decisions to disinvest NALCO in Orissa and Neyveli Lignite Corporation in Tamilnadu. The disinvestment programs were put in cold storage temporarily. The government wanted disinvestment of oil PSUs and LIC also. But amendments to the Acts of parliament on the basis of which the PSUs were formed were necessary. However, this was not possible, as the government does not have majority in the house without the support of the Left parties, which are completely opposed to the proposal of disinvestment and privatisation. In the case of BSNL, formed by an administrative decision of the government, there is no need to approach the parliament. This seems to be one reason that the government is emboldened to moot the present proposal.


While the launching of Insurance Scheme for customers was the programe for which the press and others were invited, most of the newspapers and TV channels focused the 10 percent disinvestment only. It seems that the management also wanted it the same way. The Economic Times wrote an editorial supporting the move. S D Saxena , Director (Finance) BSNL, who was present, is quoted as stating that BSNL is valued at $ 100 billion and 10 percent IPO will mean $ 10 billion or Rs 40,000 crore. The media hailed this offer of Rs 40,000 crore as the biggest in the country. The multinational corporations and Indian big business were happy that at last an opening was being made for the privatisation of BSNL, the No.1 telecom company in the country and 7th largest in the world.





The management justified the divestment proposal stating that the company requires about Rs 15,000 crore for immediate expansion. The fact is that there is no dearth of money with BSNL. There is a cash balance of about Rs 40,000 crore which can be utilised for expansion and development. When questioned by the press, Director (Finance) had to agree that finance is not for the present expansion, but for future expansion. It is thus clear that there are sufficient funds with BSNL. The complaint of employees against the management and government is that they are not taking necessary steps for expansion, utilising the available funds.




At the time of corporatisation of DOT to BSNL in 2000, it was assured by the government that BSNL will be given all assistance to ensure its financial viability in the fierce competitive market. Payment of Access Deficit Charge (ADC) was assured to BSNL to compensate the loss in providing telephones in lakhs of villages and rural areas which are non-profitable, but socially essential, as per commitment of the government. It is to be mentioned here that no private company was prepared to provide connections in the loss making areas, even though they were bound by the license conditions to do so. No action was taken against these private companies for breach of license conditions. Instead, decision has been taken to stop the ADC being paid to BSNL. It was also assured that the annual licence Fee, which BSNL has to pay to the government, just like any private company, will be reimbursed. For the last two years, this has been discontinued.


Universal Service Obligation Fund was another mechanism through which assistance was to be provided for the unviable provision of connections in rural areas and villages. There was an amount of about Rs 13,000 crore in the USO Fund, but only a nominal amount was paid all these years to BSNL, which alone was eligible for the compensation. Now the major portion of the Fund will be paid to the private companies by making the mobile connections also eligible for compensation. Thus, one after another, all the concessions given to BSNL, the incumbent operator, have been taken away putting it in a tight spot.




There is huge demand for BSNL mobile connections, since it is transparent and cheaper. Nevertheless, the incapacity of the management and the anti-PSU policy of the government combined have almost choked the growth of BSNL. In 2005, BSNL floated a global tender for 45.5 million GSM lines considering the large demand for mobiles. Purchase order could not be issued as M/S Motorola questioned the tender in the court. The case was dismissed in April 2007 and the purchase order was going to be issued shortly. At his stage, the new minister of Communications & IT, A Raja, intervened and wanted the tender to be cancelled, on the plea that the cost is higher, compared to the tender finalised by MTNL. The minister conveniently forgot the technical difference as also the difference in ratio of 2G and 3G lines in the tenders. The tender was reduced to 50 percent of the original and purchase orders issued to Ericsson for 13.5 million GSM lines only. The second bidder, Nokia refused to accept the purchase order for the balance 9.5 million, since the price was arbitrarily reduced. It was reoffered to Ericsson, which also refused.


The result is that BSNL is not having GSM lines at present to provide mobile connections. Where it used to provide about 15lakhs connections in a month, it is not even able to provide half of it now. As a result, BSNL has gone down to the fourth from the earlier second position in the number of mobile connections, behind Bharti, Reliance and Vodafone. Idea, which has only license for 7 out of 22 circles, is just behind. The intervention of the minister and the lack of vision of the BSNL management had cost BSNL heavily.


JULY 11, 2007


The Joint Forum of Unions/ Associations of non-executives and executives in BSNL was compelled to organise a strike on July 11, 2007 to save the deteriorating situation and compel the management and government to take effective decisions and actions to ensure that the lines and infrastructure are provided to the BSNL for effective service to the people. The strike was a complete success. It was deferred after one day on the assurances of the management and government that immediate steps will be taken to improve the situation. However, no serious effort seems to have been made in that direction. BSNL is still lacking GSM lines for providing mobiles to the people who are in the waiting list. Assurance by the minster and the management that a new tender for 50 – 60 million lines will be floated in August 2007 is yet to be implemented. No temporary arrangement is made to get the lines as assured.





In preparation for disinvestment /privatisation of BSNL, the management wanted to retrench 20,000 non-executive employees through VRS. The issue has been shelved for the present due to strong protest and agitation by the unions, but the proposal has not been dropped.


BSNL, on of the biggest PSU with excellent/ very good grade for the last three years and a profitable one all these years is not granted Navaratna status so far despite many assurances. The status is denied on one count or other. BSNL should be declared as Navaratna without further delay. It will give more autonomy to the Board, which is necessary


About 2000 Indian Telecom Service (ITS) officers who belong to the top level management and who are the leaders to take decisions and to ensure its implementation are not yet absorbed in BSNL. They continue in government service and are on deputation to BSNL. This unhealthy situation has adversely affected the functioning of the entire system. The government and management should take immediate action for ITS absorption, failing which there will be serious repercussion on service.


As per agreement at the time of corporatisation, government agreed to pay pension of the BSNL optioned DOT employees. Management will pay pension contribution for the existing employees to government. CCS (Pension) Rules were amended by adding Rule 37-A for this purpose. The government issued another order on June 15, 2006 asking the BSNL management to pay the government additional money if the total pension is more than 60 percent of what BSNL pays to the government towards dividend, license fee, tax etc. The workers demand that this arbitrary and unjust order should be cancelled.



FROM FEB 26, 2008

To oppose disinvestment, as also for settlement of the above mentioned demands, the Joint Forum of BSNL Unions/Associations has decided to organise an indefinite strike from February 26, 2008. There is no economic demand of workers. The demands are all related to the existence, development and growth of BSNL.


BSNL is the property of the nation, the people. It has 37,000 offices/exchanges through out the country with lakhs of acres of prime land in the centre of cities. During the period from October 2000 to March 2007 ( six and half years), BSNL had a total Revenue of Rs 2,14,474.10 crore and a net profit of Rs 41,409.04 crore after paying the government Rs 29,511.77 crore towards dividend, licence fee, taxes etc. Its asset will be more than Rs 40, 00,000 crore by even the most conservative estimate.


Out of the three PSUs carved from the Department of Telecom, Videsh Sanchar Nigam Limited (VSNL) was sold to Tata for a paltry amount of Rs 1,320 crore, while in addition to hundreds of acres of prime land, building and infrastructure, it had a liquid cash balance of Rs 1,200 crore. 45 percent shares of Mahanagar Telephone Nigam Limited (MTNL), the second PSU are already divested and any further divestment will convert it in to private enterprise. It is to be pointed out here that disinvestment has not benefited MTNL in any way. In fact, the profit has only decreased. We cannot allow the BSNL to go the same way. It should not be sold or destroyed. It should continue as PSU, grow and expand for the benefit of the people. We request the working class, political parties, well-wishers and people of the country to support this just cause and compel the government to stop from the unwarranted path of disinvestment / privatisation of BSNL.