February 14, 2019

Is BSNL Going to Shutdown Soon?

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BSNL, one of the biggest telecom corporations in India, is not lucrative anymore. Therefore, the government has supposedly asked the company to discover “all options”, which even includes the closure. Yes, you heard it right. In case, everything fails, as there are huge chances that the things are probably going to fail, the government possibly will sell or shutdown BSNL.

As per a report by TOI, the directives of government to BSNL came subsequent to the meeting of the top official of the company with Aruna Sundararajan, telecom secretary. The chairman of BSNL, Mr. Anupam Shrivastava, talked about the current financial circumstances of the organizations, it losses, prospects of voluntary retirement plan, how it was affected by the introduction of Jio, and untimely retirement actions for employees in a meeting.

The government administrators have asked BSNL for the preparation of a letter on what will occur if its business is closed. The other choices that the government has given to the company consist of calculated disinvestment of corporation and restoration. In addition, it has been requested to offer a proportional examination of all these preferences.

BSNL that is famous for giving landline, broadband and mobile facilities in the country posted a loss of around Rs 4,793 crore in the year 2016-17. Though the enterprise is still to proclaim its economic outcomes for the year 2017-18, it has been stating losses for the past three years.

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If the guidelines given by the Department of Public Enterprises are to be considered, then it is revealed that BSNL has been confirmed “Incipient Sick.” The government considers a public sector corporation “Sick” if it announces losses in any fiscal year equivalent to 50% or its average net value throughout four years straight away earlier such fiscal year.

The government has been informed by the BSNL that apart from the aggressive contest in the market, the company is stressed with its huge aging employees’ population. A spokesperson from the company informed TOI,

“If the age of superannuation is reduced from 2019-2020, there would be savings of approximately Rs 3,000 crore in the bill,”

The difficulty for BSNL is that although it has a great figure of subscribers, the cooperation has not been capable of competing, for a variety of reasons, with the organizations, including Vodafone, Jio, and Airtel. Within the past few years, it has unsuccessful to advance its network to 4G that might have permitted it to fight with Airtel, as well as Jio. Likewise, it has struggled to compress its fiber broadband facility.

It would not be wrong to say that for an extended time, BSNL got subscribers due to its reach. This is because it was accessible in areas where any other telecom organizations didn’t exist. Nevertheless, that is something Airtel and Jio in the previous few years have been competent to counter since they have enhanced their network accessibility.