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From FY25 onwards, the telecom PSU intends to post a 20% year-over-year rise in revenue.
In the view of BSNLEU, the engaging of BCG is a futile exercise.
They reasoned that despite the implementation of their recommendations, BSNL’s condition has further deteriorated.“...the decline of BSNL is attributable to the company's inability to expand its networks with state-of-the-art technology.
From 2007 to 2012, BSNL was unable to procure equipments necessary for the expansion of its mobile networks.
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NEW DELHI: Government-owned Bharat Sanchar Nigam Limited ( BSNL ) has roped in American Boston Consulting Group ( BCG ) to strategise a revival roadmap for competing with private telecom operators Bharti Airtel , and Vodafone Idea , an exercise which has been termed as "futile" by an employees’ union.Under the 34-month deal , BSNL will pay BCG Rs 132 crore for its consultancy services . The expected outcomes include enabling the telco to achieve government-assigned targets by strengthening existing business segments, leveraging emerging technologies, and cost-reduction while significantly improving BSNL’s service delivery in line with “industry benchmarks and best practices”, and transforming sales and marketing capabilities.The US-headquartered BCG will also be awarded performance incentives, according to the work order dated May 20, 2024, which ETTelecom has reviewed.Under the two-phase strategy, the first phase will focus developing solutions to revive BSNL and achieve targets in verticals such as consumer fixed access, consumer mobility, and enterprise business.BSNL has set a target to achieve Rs 35,960 in revenue from operations by FY28 – up by 80% – compared to an estimated Rs 20,008 crore revenue in FY24. From FY25 onwards, the telecom PSU intends to post a 20% year-over-year rise in revenue. It is also targeting an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) of Rs 12,110 crore, compared to an estimated Rs 1,839 crore in FY24.Further, BSNL stated in the deal terms that it would “like to implement an immediate and long-term plan for a reduction in the operating expenses (in Rs crores) by 5% annually, in line with industry best practices”.The first phase, focused on gap analysis and solution development, will broadly cover six areas, including an improvement in quality of service (QoS) parameters in 11 key circles – Kerala, Tamil Nadu, Karnataka, Punjab, Gujarat, UP West, UP East, West Bengal and Rajasthan & CNTX South/North circles.“BSNL lags behind other telecom operators on key network QoS parameters , for EB, CFA and CM. Improvement is required in Network Availability, BTS downtime, Call-drop rate (QSD), VLR %, CFA fault (per 100 subs/ month), MTTR less than 4 hours, and other QoS parameters such that leading industry standards are met,” the telco said in the document.To capture 4G subscribers, BSNL is seeking an overhaul of its distribution, and sales and marketing strategy, with an emphasis on digital sales and marketing to generate leads and promote products.BSNL has sought the design and development of a new sales and distribution policy with a 25% reduction in total outgo on commissions and incentives.In the second phase, BSNL said it may consider implementing the recommendations in a phased manner, subject to the availability of resources, primarily capital expenditure funds. The state-run telco will initially implement the required solutions in 10 circles, followed by a country-wide deployment in 33 circles.“It is regrettable that BSNL Management has resorted to undertaking cosmetic exercises. In the view of BSNLEU, the engaging of BCG is a futile exercise. It has resulted in the unnecessary expenditure of Rs.132.16 crore,” John Verghese, Acting General Secretary of the BSNL Employees Union, said in a letter to PK Purwar, CMD, BSNL.ETTelecom has reviewed a copy of the letter, dated May 27, 2024.“We suggest that the Management leverage the existing talent and experience within its workforce. It is unfortunate that this talent and experience are not being utilized to their full potential,” Verghese said, adding that in a recent meeting, Purwar informed the union that 90% of the company’s work would be outsourced in the future.“This (outsourcing) approach will lead to further wastage of resources and under utilisation of existing manpower,” he said.According to the union, the company’s management has engaged consultants such as Deloitte and KPMG ever since BSNL incurred losses in fiscal 2009-2010. They reasoned that despite the implementation of their recommendations, BSNL’s condition has further deteriorated.“...the decline of BSNL is attributable to the company's inability to expand its networks with state-of-the-art technology. From 2007 to 2012, BSNL was unable to procure equipments necessary for the expansion of its mobile networks. Subsequently, the Management’s failure in the timely deployment of 4G and 5G technologies has significantly contributed to the current crisis,” Verghese said.A Tata Consultancy Services (TCS)-led consortium along with ITI Limited are currently deploying a homegrown 4G network for the ailing telco.Anil Kumar Lahoti, Chairman of the Telecom Regulatory Authority of India (TRAI) recently said that BSNL and Vodafone Idea (Vi) have started on a “positive turn” after struggling with finance and infrastructure-related constraints.Lahoti had said that the government has released Rs 3.2 lakh crore in multiple tranches to revive BSNL and enable it to compete with private telcos.
