These days no other telcos in India are making more headlines other than State own BSNL & MTNL. There’re 2-3 major news stories going around the web about BSNL/MTNL:
- The mess of connection with Private Operators likes Airtel, Idea & Vodafone.
- It’s planning to cut jobs massively in Landline department.
- It might exit telecom business entirely or might get required subsidy to cover losses or quit BWA business in 17 Circles etc etc.
But do you really think are these measures going to alleviate the real pain of Operating losses for past 2 years? Is BSNL only treating symptoms or actually thinking to revive business entirely?
After sustaining the momentum for 8 years since inception, BSNL started feeling the heat of TelecomIndia’s adverse environment. In fact till Mar 2009, everything was going OK .Or there’re warning signs, but ignored.
First of all you have to understand what hasn’t changed in past decade at State Own Telecom Organizations. This analysis comes from my experience of working with them for quite some time now.
Creation of BSNL/MTNL from DoT was the best bet GoI could make during year 2000. What hasn’t changed is the way they function. No work is carried out in-house. Even the simplest of simple tasks are outsourced at cost much higher than market rates & then implemented with zero accountability with lowest quality. This continues till date.
We all are somewhat aware of how these organizations function. To carry out any telecom related activity, they call upon tenders with some terms & conditions. But it has been observed that these tenders are often won either at lowest cost (far below market rates) & delivered at lowest quality.
Let’s say MTNL invites tender to maintain telecom towers in South Mumbai region. In order to bid & win the contract, participating firms often quote par below prices to maintain towers. Now when the contract of work is awarded, how would someone deliver quality at par below market price? Consequently, this inferior work becomes bottleneck for superior network performance, which other private players tend to mange at far better level.
In fact it has been observed that the accountability of such low quality work is often evaded. The poor delivery results in poor show. Customer churns out with despair. Revenues lost. See how BSNL is losing revenues. Does anyone know, despite growth in subscriber figures, why revenues aren’t rising? Is it customer churn or poor network performance or little customer satisfaction?
Not only that, but one another major factor contributes to poor show. Most of the government officials aren’t competitive enough even to understand what’s going on behind the scene. It becomes contractor’s obligation to update about each & every smallest tasks, that too without any accountability. Why Government officials aren’t made accountable for the poor show in their respective divisions?
The overall understanding of market is missing even at very C-level. The dynamics of market has changed, but executives sitting inside aren’t even aware of things on field. There’s little commercial sense among most of the employees. Suppliers, Vendors and Contractors are treated with neglect. In fact, most of the employees might not even be aware of the fact that their organizations are running into losses. Sad story behind scene!
Why do such organizations exist, if they are living every day at the mercy of all external factors? Is only reducing headcount going to solve issues? What about low quality work going on & on? Who should be held accountable for inviting low quality contractors to maintain networks resulting into pain for customers? What about official tendency of favorism among suppliers & vendors? The entire servicing ecosystem is out-of-date.
The backend issues are more sever than what media has often reported. These aren’t often limited to few financial ratios, but yes they do represent the grim picture of government’s tendency to neglect their own customers & partners in business. No one is willing to talk to revamp entire system of autocratic mannerism with zero accountability. I bet, many suppliers and contractors doing business with these companies are really not in mood to continue to work with them. Poor show will continue behind scene. Is DoT serious about running these organizations for just sake of existence or sooner going to throw burden away?
Is there anyone out to discuss real pain of BSNL/MTNL rather than deliberating on symptoms only?
Let the market punish those who don’t oblige.
