Telecom sector

In the last couple of decades technological advances have transformed communication. High speed and efficient Telecommunication has now become critical for industry, agriculture, education, health, disaster management and almost everything that touches our lives.

In our country too in the last decade the Telecom sector has expanded very fast and now it is the second largest in the world. It has 118 crore mobile subscribers. India also stands second in the world for downloading mobile applications. It has 75 crore internet subscribers.

This sector generates an annual revenue of more than Rs. 2,70,000 crore and is expected to grow continuously. That is why Indian and foreign monopolies are interested in the Indian market.

Highly monopolised telecom sector!

Many private companies, Indian and foreign, entered the Telecom sector between 2000 and 2015. But over this period more than 16 of them have either closed operations or merged or have been gobbled up by other private sector companies. As of now the Telecom sector is highly monopolised, with only 3 private sector companies having close to 90% share while the rest is with BSNL.

To finish off the competition and create a monopoly, JIO deliberately launched free service and predatory pricing to attract consumers. During this period, instead of supporting BSNL, the Government at the highest level has been supporting JIO and that too quite brazenly. JIO connections have been given to all officers of the North Block and South Block in New Delhi, from Secretary downwards. The current Prime Minister even became the brand ambassador of JIO which gave its product for free. Despite rules, JIO was allowed to maintain its promotional pricing scheme beyond three months.

Due to the predatory activities by JIO, Airtel lost Rs. 63000 crores from 2019 to 2021, Vodafone Idea lost Rs. 88,000 crores from 2019 to 2020 and BSNL lost Rs. 38000 crores from 2018 to 2020. Of course none of these private companies is taking risk with their own money. All of them have taken loans from banks and financial institutions to expand infrastructure and as of 31st March 2020 the total debt of telecom companies was more than 4.4 lakh crore. Most of this is likely to get converted to NPAs of banks, thus robbing the hard earned savings of working people.

Accelerated march towards complete privatization

Starve the existing public sector enterprise, cripple it to an extent that consumers will start blaming the workers of that public sector enterprise, make policies which will directly and indirectly aid the private sector, start corporatization of the public sector enterprise and finally make a push for privatization, are the tactics followed by every incumbent government since the policy of Globalization by Liberalization and Privatization ( LPG ) was launched by the Rao-Manmohan led Congress government in 1991-92. These tactics are most starkly visible in the case of the Telecom sector. As a result of these tactics the Telecom sector which was totally in the public sector in 1995, has become 90% in private sector in just 25 years.

Various Central Government policies in aid of privatization

1984: The then Congress government signed an agreement with France Alcatel and started importing electronic circuits, thus heralding private entry into the Telecom Department. The next year all the production in ITI, a public sector enterprise was shut down.

1985: The corporatisation of the Telecom sector started by forming MTNL and VSNL.

1991: The policy of LPG (Globalisation through Privatisation and Liberalisation) was launched.

1994: The government opened up the Telecom sector for private players but couldn’t attract many as the Telecom department was both service provider and policy maker.

In 1994-95, when the Congress was in power, it brought a Bill aimed at the corporatisation of two of the three departments that comprised the Telecom sector.  At that time this was opposed by the parties in opposition like the BJP. However, on coming to power in 2000, both telecom services and operation were corporatized by the BJP government.

1995: Airtel began operations with 2G technology.

1997: The Telecom Regulatory Authority of India (TRAI) was formed so that many big private players could enter the sector.

1999: A new National Telecom Policy (NTP) was announced.

2000: BSNL was formed.

2002: Private players were allowed to provide basic and cellular services to customers.

2008: VSNL was privatised and sold to the Tata group; 3G technology was introduced

By 2010: More than 15 companies were provided with 3G services while the contribution of the public sector was deliberately reduced. The market share of BSNL dropped by 17%, while many private companies started flourishing.

2012: The NTP was revised again as “One nation one licence” so as to make it easy for the private players like Tata, Birla, Mittal, etc. to monopolise the market. 4G technology was introduced by various private players, but BSNL was denied this technology by the then ruling Congress government.

Now, the trials for 5G by Jio have already been started while roadblocks continue to be placed in the way of the 4G service by BSNL.

• Assets of BSNL as per its Annual Report on 31 Mar 2020: Rs. ₹146,758 crore (US$21 billion).
• Its land assets alone all over the country – Rs 3 lakh crore at current market value
• More than 7.5 lakh route km of optical fibre network and more than 66,000 towers. It took more than 15 years to set up this infrastructure.
Capitalists want to capture these valuable assets of BSNL which belong to people of India.
The number of workers has been brought down from over 2,20,000 in 2015 to less than 70,000 in 2020 to prepare for its privatisation.

Systematic and deliberate throttling of BSNL

While all the above policies were being implemented to aid the private sector, the public sector enterprise BSNL was deliberately curtailed.
From the day BSNL was formed there was no budgetary support at all. All expenditure is met from its internal resources. Rs. 7,500 crores were given at the time of the formation of BSNL and the government had said it won’t take back this money. But, Rs.14,000 crore was taken back from BSNL, ignoring the promise. BSNL is responsible for ensuring services in rural areas. BSNL is essential for the functioning of many of the government offices in the rural areas as well as for ATMs and banks. Operations in these areas are not profitable. Initially the Government of India was compensating BSNL for these services. However the government stopped this compensation as a result of which more than Rs.10,000 crore of dues are pending with it. According to estimates incurs a loss of Rs. 4000 crores per year to maintain its 18000 exchanges in rural areas.

Private players were allowed to enter the Telecom sector in 1995. BSNL, through formed in 2000, was not allowed to enter the mobile market till 2002. This was deliberately done by the government to ensure that the private sector could flourish and grow by leaps and bounds without any effective competition from BSNL. Finally only after the employees of BSNL fought in the Delhi High Court, was the the Government of India ordered to provide license to BSNL and MTNL for mobile operations.

This history was repeated when 4 G spectrum technology arrived. When business was booming and other operators were adding millions of connections per month, BSNL was starved of the resources needed for growth. It was adversely affected by government policies, political interference, non-allotment of 4G spectrum, non-appointment of Board of Directors and bad management decisions. 4G technology was introduced by various private players but BSNL was denied this technology by the then ruling Congress government. While all other operators were allowed to start 4G services with foreign equipment in 2014 and all of them upgraded by 2017, the Make in India policy was made mandatory only for BSNL, which could not start 4G operations, because there was no Indian supplier ! BSNL with a revenue of Rs.30,000 crores did not have a Director of Finance from 2013 to 2020! After lot of struggles for almost 3 years by the BSNL employees, the Union Cabinet approved the BSNL Revival Plan as late as 23/10/2019. By that time private operators had moved way ahead!

BSNL was denied 4G technology while the Indian Railways have been allowed next generation 5G technology. This is because private train operators want to use this technology to run their trains and signalling system. Due to their lobbying, 5G was allotted first to the railways.

It is very clear that successive governments have throttled the expansion of BSNL so as to ensure that private sector expands freely.