oppn parties BSNL-MTNL Merger Will Work Only If Old Management Theories Are Junked

News Snippets

  • Citizenship Bill to be tabled in the Lok Sabha today. Heated debate likely
  • Domestic tourism in Kashmir slumps by 87% in August-November period
  • Prime Minister Modi says police must make women feel safe
  • West Indies beat India by 8 wickets in the second T20 at Thiruvananthpuram
  • Rahul Gandhi says the NDA government kept Chidambaram in jail for so many days in order to take revenge
  • Kohli reclaims the top spot in ICC rankings from Steve Smith
  • Cabinet clears the Citizenship Bill. It will be placed in the Lok Sabha in a day or two
  • Hindu Jagran Manch members clash with the police in Kolkata after being refused permission to take out a rally
  • West Bengal Governor Jagdeep Dhankar says important files were sent late to him and his delay in signing them draws criticism from the TMC. It also brings the state assembly to a halt
  • 92,000 BSNL & MTNL employees apply for early retirement taking advantage of the new government offer. It will result in an annual savings of Rs 8.700 cr for the merged entity
  • Dengue deaths multiply in Kolkata even as the CM, Mamata Banerjee, asks the opposition not to politicize the matter
  • Government orders inquiry into the breach of security at Priyanka Vadra's house
  • Chennai-based engineer Shanmuga Subramanian helps Nasa find the pieces of Vikram lander on the Moon's surface
  • New Maharashtra CM Uddhav Thackeray says his administration will take back cases against Dalits and activists in the Bhima Koregaon case
  • Dhawan calls his dismissal "nonsense"
43 killed in a fire at units in illegal building in heart of Delhi
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BSNL-MTNL Merger Will Work Only If Old Management Theories Are Junked

By Sunil Garodia

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.

The government's decision to merge BSNL and MTNL clearly shows that it is aware that telecom is going to play a huge role in India's development since it is a great facilitator on which a host of economic activities and national security depend. It also shows that the government also recognizes that with rapid progress in emerging technologies in the sector, it cannot be left entirely in the hands of private players, especially since they would not be guided by the social good and might not serve areas where they do not see any profit.

On purely economic considerations, the merger is like throwing good money after bad. Both the PSUs have huge accumulated losses and are losing lots of money every month. They are heavily overstaffed, mismanaged and their marketing is based on stone-age principles. But in governance, economic considerations cannot be the sole criteria for taking decisions. The government has announced a liberal voluntary retirement package for employees above 50 years of age. That would eliminate a lot of deadwood from the two entities. But would that be enough?

The telecom sector is hugely competitive and needs massive and regular funds. Although the merged entity would be blessed with an infrastructure that no private player can match, it also needs to be stated that even private players with deep pockets are losing money. Even as this is being written, it has been reported that after the Supreme Court ruling on adjusted gross revenue, just Airtel and Vodafone-Idea would have to pay the government a total of Rs 50k cr out of the total of Rs 92k cr payable by the telecom companies.

If the government is serious about reviving the merged entity, voluntarily retiring senior employees will not be enough. It will have to change the way the entity will work. It will have to bring in fresh talent, if possible from the private sector and completely junk the current marketing policies. It will have to think of a name for the entity that appeals to the younger generation. It will have to invest in research and adopt cutting-edge technology before the private players. It will have to show the customers that it is not a sloth-filled and careless PSU but a competitive, new-age entity that can match and even overtake private players in providing the best services.