BSNL, MTNL users put on hold as voluntary retirement scheme hits service

Topics BSNL | MTNL | VRS package

It now seems that the BSNL-MTNL asset monetisation programme could become a good part of that estimate
Vinod Desai, an Ahmedabad-based retired bank official, has been visiting the local Bharat Sanchar Nigam (BSNL) office every week for the last two months to complain about his landline connection going dead.


“Officials say the recent voluntary retirement scheme (VRS) has reduced the workforce and that is hampering the service quality,” points out Desai, who’s planning to shift to a private service provider for landline connection. Geo Verghese, a businessman from the same city, has found the internet speed of the BSNL broadband connection “unsatisfactory”. Desai, a BSNL loyalist, is not alone to have felt let down by the state-run telecom behemoth, which saw around 55 per cent of its staff leave after accepting a VRS package.


In Hyderabad, a harassed Suresh Kumar, another BSNL landline user, points out that the company is taking much longer than before to respond to service complaints. The blame is on the VRS. Several others across the country contacted by Business Standard narrated similar customer experience for BSNL connection — both landline and mobile.


If BSNL is a pan-Indian story of increasingly indifferent service, Mahanagar Telephone Nigam (MTNL), the other state-owned telco that operates only in Delhi and Mumbai, is no better.


“The residence landline has been off for some weeks now and complaints haven’t helped. Calls made to top MTNL executives, too, didn’t yield result. It seems the company does not have the manpower to attend to complaints,” said an angry Mumbaikar, who’s clearly given up.


Landlines down for four to six weeks is commonplace in Mumbai now, and so is the grievance about erratic broadband connection in the city. And, it doesn’t help when a customer lands up at the almost-deserted MTNL offices, whether in Mumbai or Delhi.


Around 75 per cent of the MTNL staff took the VRS offer and left recently. And, it doesn’t help when a customer lands up at the almost-deserted MTNL offices, whether in Mumbai or Delhi. Around 75 per cent of the MTNL staff took the VRS offer and left recently.


The official stand


But, the plush BSNL headquarters at downtown Janpath in New Delhi doesn’t quite capture the air of all-round despondency. P K Purwar, chairman & managing director, BSNL, said on Saturday that the existing employees have responded well to the challenges. The numbers are big: BSNL and MTNL have shed 92,869 at one go through the VRS. While BSNL let go of 78,569, MTNL’s offer was taken by 14,300.


Together, they have around  123 million subscribers (mobile and landline) in the country out of a total telecom user base of over 1.2 billion. In landline, these two hold over 60 per cent of the market share.  


Admitting that BSNL was overstaffed, another senior BSNL executive said the overall impact of the VRS on the company’s operations was minimal. In fact, both MTNL and BSNL executives claimed it was business as usual. 


Of the total number of BSNL employees who took VRS, a majority — 55,000 — made up for non-executive staff. In the case of MTNL too, the non-executive category formed the chunk in taking VRS.


“The retirement scheme was opted by employees of all levels at our company and there was no cadre-based differentiation while offering the scheme,” said Purwar. Age (above 50) was the only condition for accepting the application and there has been no rejection.

The properties, if sold, could bring in the cash to finance the VRS. The exercise will need between Rs 30,000 crore and Rs 40,000 crore


Outsourcing for future

The state-level executives, however, sounded more realistic.


In BSNL’s Gujarat circle, for instance, tenders are being floated across the circle units for roping in outsource partners following guidelines from the corporate office recently. Of the roughly 10,000 workforce in the state, around 6,468 opted for VRS, leaving the circle with staff strength of just 3,532.


“We are looking at improving our services, though there are no details yet on any further investments. The outsourced partners will manage our copper lines for landline connections. This is because majority of those who opted for VRS are from among the Group C staff who used to maintain these lines,” said an executive from the Gujarat circle. Maintenance of optic fibre network may also be outsourced.


Similarly, at BSNL offices in Hyderabad, officers managing the post-VRS situation have redeployed staff from back-end administrative work at customer service centres.


“Manning the customer service centres and handling of fault rectification are our priority. We are trying to ensure the least possible disruption at this difficult juncture. The tenders for outsourcing of these functions are already at an advanced stage,” a senior BSNL executive said in Hyderabad.


In Chennai, where almost 33 exchanges out of the total of over 200 in the city and its suburbs barely had any staff since February 1, the unions have been active. “Our union had to immediately talk with the management here and make some arrangements, so that at least skeletal staff was allocated in these exchanges and they are not closed,” said C K Mathivanan, senior vice-president of the National Federation of Telecom Employees at BSNL.


As for the customer service centres in Chennai, around 22 out of a total of 52 may be eventually closed down or handed over to private franchise.


The impact is seen even at the centres where BSNL has subsidiaries.


Bhanu Kiron Chakraborty, a retired Damodar Valley official has been lamenting the deterioration in Calcutta Telephones’ service quality. Chakraborty (79), a supporter of nationalised enterprises, has been using this connection since 1972. “I’m too old to get used to smartphones and so have kept this connection,” he said.


But, according to Chakraborty, the quality of voice service as well as data speed has been falling for the past two years, much before the VRS was offered.


Banking on contract labour


In Uttar Pradesh (UP), where the decision to outsource some of the services has already been taken, a BSNL executive pointed out that manpower crunch was real. The remaining BSNL staff now shoulder greater responsibilities, he said.


Across two circles — UP (East) and UP (West) in the state — where the staff strength has shrunk to nearly 3,300, from about 6,900, the mobile phone base is at an estimated 16 million.


It seems while the mobile subscriber base has remained constant in UP even after the VRS, the landline services are facing the heat of the sudden staff reduction.


Although some of the centres are actively looking for ad-hoc and contractual employees, the process would take time for BSNL and MTNL, which the policymakers have been wanting to merge for several years but have failed to because of resistance from unions.


The VRS package


A couple of days before Diwali in October 2019, the Union Cabinet had approved a relief package worth nearly Rs 70,000 crore for BSNL and MTNL, followed by a merger of the two entities.


The package includes a sovereign bond issue worth Rs 15,000 crore to be serviced by the two telecom companies.


Both BSNL and MTNL will be allotted 4G spectrum at administered price (or an internal pricing structure) at 2016 auction prices and the real estate assets of the two companies would be monetised. The details of the scheme will be finalised by the two companies. The process for asset monetisation and roll-out of 4G spectrum is yet to commence.


In the VRS package, the government has approved Rs 17,169 crore as ex-gratia component and Rs 12,768 crore for advancement of pensionary benefit.


The government plans to monetise MTNL and BSNL assets worth Rs 37,500 crore over a period of three years to raise resources for retiring debt, servicing of bonds, network upgrade, expansion and meeting the operational fund requirements. The assets include land as well as rental and leasing of buildings. MTNL has around 29 retail outlets in Delhi alone.


The fact that historically private telecom companies have been spending 5-10 per cent of their total expenditure on staff, against 70 per cent by BSNL and MTNL, brings out the size and impact of the VRS at the two state-owned telcos. From a strength of 198,000 employees till a few months ago, BSNL and MTNL are down to almost half. The service shake-up has to accompany such a major staff reduction exercise, as an old-timer pointed out.  


With inputs from Vinay Umarji in Ahmedabad, Avishek Rakshit in Kolkata, Gireesh Babu in Chennai, Dasarath Reddy in Hyderabad, and Virendra Singh Rawat in Lucknow


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