BSNL's turnaround move: New chief to issue 15 m GSM tenders

In an interview with CNBC-TV18’s Siddarth Zarabi, Upadhyay discusses the way forward and the future of Bharat Sanchar Nigam Limited.

Upadhyay said that BSNL has missed the mobile revolution from 2007-2011 as it did not procure any GSM equipment during this period. Hence the company is bleeding and unable to match pace with the fast growing industry.

"We are now planning to go for an approximately 15 million GSM lines tender, the work is in very advance stage and I hope that very soon this tender may be floated," Upadhyay added.

Q: You have just got into a company which was once an absolute asset for this country. But in the last four years, it has slipped from being somewhere at the very top to a company which is now number six in revenue market share. It has been making losses in the past four years and there are big question about its future. You have perhaps the toughest job in the telecom sector in this country. So, how is it for you and what are your plans going forward?

A: At this juncture, its one of the toughest job in the industry but I am quite confident that with the support of all the stakeholders it’s definitely possible to turnaround BSNL in a foreseeable future. We found that our total revenue of BSNL has been continuously on decline since past couple of years. My first job hence is to arrest that decline and then try and increase it. We were Department of Telecom (DoT) and then we were cord out of DoT in October 2000 and made into a corporation.

That day on we were supposed to work on commercial lines and compete with Greenfield operators. So not being Greenfield operator has a disadvantage that we inherited a large legacy staff. The total workforce with me today is 280,000.

Q: All your other competitors don’t even have that large workforce.

A: Yes, some of the industry analysts say that I shouldn’t have more than 100,000. So that’s the situation. You will be surprised to know that about 60% of my total revenue was towards wage bill. Any business in this world, more so telecom, which is operating in a very hyper competitive scenario, can’t afford 60% of its revenue to go only towards salary bill.

Q: And perhaps no other operator in the world even those which are state-owned would have 60% wage bill component?

A: Definitely not, because if you are paying 60% towards wage bill then for running the operations what is left. Then coupled with that you are in a scenario where the technological innovations, developments are catching up very fast so therefore you must have money for capex. Unless and until you go on renewing your assets you go on losing your business.

Q: I want to take one of the first important points that you spoke about- arresting the decline in revenues. Give us some sense of the number then what sort of targets you have set in internally because you operate on a circle wide basis all across the country. What is your broad sense in terms of revenues that you expect for the current year? What is the increase that you have set as a target?

A: In the month of March every year every PSU signs a memorandum of understanding (MoU) which basically outlines different parameters including revenue targets. I think Rs 737,000 crore is the revenue target given to us for this financial year.

Q: And you think, you are on track to achieve that?

A: Yes, we will make all possible efforts. We will leave no stone unturned to achieve that.

Q: You talked about the workforce and while there are some people who would say that it is a big liability, possibly other options also to look at the rationalising the work that you are employing when it comes to your workforce and the headcount?

A: We have a large workforce so we have a large network as well. We are the only pan India operator in true sense. I can say that so most of my staff traditionally was deployed in landline business, which is in any case decreasing but we have found ways and means to redeploy our staff to the extent possible wherever the staff was of the right aptitude, right attitude and right age profile.  We have redeployed them in our sales and distribution activities. Also we have large number of customer service centres which we have revitalised and we have tried to use our staff in those customer service centres but the age profile of my workforce is about more than 50 so therefore there is a limit to which you can redeploy and retrain.

Q: Can you ever offer a Voluntary Retirement Scheme (VRS). Is that part of your plans at this stage?

A: Why not? Many companies are considering VRS and so BSNL is also not averse to the idea of VRS per se but there are no concrete plans as yet though we would definitely like to work out some plausible plan which is acceptable to our employee. Also at this moment of time one of the biggest challenge in bringing any VRS scheme would be finances.