NEW DELHI: Government-owned Bharat Sanchar Nigam Limited (BSNL) has the American Boston Consulting Group (BCG) to come up with a revival roadmap for competition with the private sector telecom operators Trust Jio, Bharti AirtelAnd Vodafone ideaan exercise that has been labeled “pointless” by an employee union.
Under 34 months agreementBSNL will pay BCG Rs 132 crore for this consultancy services. The expected outcomes include enabling the telecom sector to achieve government-mandated targets by strengthening existing business segments, leveraging emerging technologies and cutting costs, while significantly improving BSNL's service delivery in line with 'industry benchmarks and best practices', and sales and marketing capabilities are transformed. .
US-based BCG will also receive performance incentives, according to the May 20, 2024 work order, which ETTelecom reviewed.
As per the two-phase strategy, the first phase will focus on developing solutions to revive BSNL and achieve objectives in verticals such as consumer fixed access, consumer mobility and enterprise operations.
BSNL has set a target of achieving revenue from operations of Rs 35,960 by FY28 – an increase of 80% – compared to an estimated revenue of Rs 20,008 crore in FY24. From FY25 onwards, the telecom PSU aims to achieve a 20% annualized revenue increase. It is also targeting 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 to reduce operating costs (in Rs crores) by 5% per annum, in line with industry best practices”.
The first phase, focused on gap analysis and solution development, will broadly cover six areas, including improvement in Quality of Service (QoS) parameters in eleven key circles – Kerala, Tamil Nadu, Karnataka, Punjab, Gujarat, UP West , UP East , West Bengal and Rajasthan and CNTX South/North circles.
“BSNL continues to lag behind other telecom operators on key network QoS parameters, for EB, CFA and CM. Improvement is needed in network availability, BTS downtime, call drop rate (QSD), VLR rate, CFA error (per 100 subs/month), MTTR less than 4 hours and other QoS parameters, so that leading industry standards are met.” the telco said in the document.
To capture 4G subscribers, BSNL is aiming to overhaul its distribution and sales and marketing strategy, with a focus on digital sales and marketing to generate leads and promote products.
BSNL has sought to design and develop a new sales and distribution policy with a 25% reduction in total expenditure on commissions and incentives.
In the second phase, BSNL said it may consider implementing the recommendations in a phased manner depending on the availability of resources, mainly investment funds. The state-owned telco will initially implement the required solutions in 10 circles, followed by a nationwide rollout in 33 circles.
“It is unfortunate that the BSNL management has resorted to cosmetic exercises. According to BSNLEU, calling in BCG is a pointless exercise. It has resulted in unnecessary expenditure of Rs.132.16 crore,” John Verghese, Acting General Secretary, 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 propose that management leverage the existing talent and experience within its workforce. It is unfortunate that this talent and experience is not being fully utilized,” Verghese said, adding that Purwar informed the union at a recent meeting that 90% of the company's work would be outsourced in the future.
“This (outsourcing) approach will lead to further wastage of resources and underutilization of existing manpower,” he said.
According to the union, the company's management has roped in consultants like Deloitte and KPMG since BSNL suffered losses in the financial year 2009-10. They reasoned that despite the implementation of their recommendations, the condition of BSNL has further deteriorated.
“…BSNL's decline is due to the company's inability to expand its networks with state-of-the-art technology. From 2007 to 2012, BSNL was unable to purchase the equipment needed to expand its mobile networks. Subsequently, management failure in timely deployment of 4G and 5G technologies has significantly contributed to the current crisis,” Verghese said.
A consortium led by Tata Consultancy Services (TCS) and ITI Limited are currently implementing a proprietary 4G network for the ailing telecom provider.
