BSNL crisis aggravated by Modi's patronage to Reliance Jio

BSNL can be saved only by employees’ uncompromising struggle against Modi’s corporate appeasement policy

Economy
Reading Time: 7 minutes

The public sector telecom company BSNL is struggling to pay salaries to its 175,000 employees all over India. Even the MTNL, which operates in New Delhi and Mumbai, is also struggling to pay salary to its 22,000 employees. In the Financial Year (FY) 2017-18, BSNL had an annual loss of Rs 79.92 billion whereas, in FY 2016-17 the loss was Rs 47.93 billion. As the crisis intensified, the telecom ministry of Prime Minister Narendra Modi’s government has asked BSNL to axe employees to reduce its wage bills. Reports say that the BSNL management has decided to axe nearly one-third of its total employee strength — that is 54,000 employees — as soon as the Lok Sabha elections are over.

This forceful “voluntary retirement scheme” (VRS) package is strongly opposed by the trade unions who have called this an attempt to appease the private telecom operators, especially Modi’s patron Mukesh Ambani’s Reliance Jio, which has played the role of a catalyst in hastening the downfall of the BSNL. Rather than the VRS package, rather than throwing out 54,000 employees into a reign of uncertainty, the BSNL employees are asking for 4G spectrum allocation, which will help the company to survive and compete with the big crony-comprador Reliance group’s mobility company. For the first time in the Indian telecom sector’s history, the employees, and not the owners, are demanding spectrum for a company that’s at the verge of languishing.

Earlier, a similar VRS package was used to revive the fortune of the ailing MTNL, where many employees were axed, however, the enterprise couldn’t achieve any profitable status due to unavailability of 4G spectrum. Moreover, the BSNL employees, who participated in a massive rally in New Delhi on 5 April to raise their just demands, questioned the Modi regime’s swiftness in asking the banks to bail out the crisis-ridden private carrier Jet Airways, while imposing a moratorium on BSNL seeking loan from banks, except for capital expenditure. BSNL, according to its employee unions, is the company with the least debt in the market vis-a-vis Reliance Jio, which has more than Rs 1 trillion of debt at present.

Manoj Sinha, the telecom minister, promised to allocate 4G spectrum to BSNL, however, the government took no decisive steps to fulfil this promise even when it has announced that the first 5G spectrum auction will take place sometime in mid or late 2019. It’s a sign that the Modi regime is postponing the 4G spectrum allocation to the BSNL until Reliance Jio is awarded 5G spectrum to push the company towards the verge of destruction. The reluctance of the Modi regime in allocating 4G spectrum to the ailing public sector unit (PSU) and its Delhi-Mumbai counterpart, MTNL, shows that it’s ready to sacrifice the PSU on the high altar of corporate appeasement to keep the senior Ambani patriarch happy.

Both BSNL and MTNL were formed when BJP’s Atal Bihari Vajpayee-led NDA government started privatising the telecommunication sector in 2000, under the supervision of Late Pramod Mahajan, to suit the interests of the big comprador capitalists and foreign corporations who were drooling to foray in the Indian telecom market. With a massive infrastructure, a large workforce and cutting-edge technology, BSNL and MTNL became super players in the telecom and mobility industry and remained the sole market leader for many years.

The corporatisation of a government department was done with an aim of privatising them further to allow private companies enjoy the infrastructure and network of a PSU enterprise built with the people’s money. As of now, the BSNL’s 57% shares are owned by the Union Government, while 43% shares are owned by different financial organisations and private individuals.

From being the largest telecom, mobility and internet service provider until the mid-2000s, BSNL and MTNL started facing a steep decline with the Indian government’s policy of promoting the interests of the private telcos in the spectrum distribution process through corruption. During the UPA II regime’s rule, the BSNL started suffering losses as its infrastructure was allowed to be plundered by private telcos due to an evil nexus between the telco owners, bureaucrats and the political leadership of the government. The 2G and 3G spectrum scams show how the BSNL and MTNL were forced to suffer by the UPA to enrich few corporate houses.

While the BSNL earned a profit of Rs 5.75 billion in FY 2008-09, its revenue continued to fall in the FYs 2010-11, 2011-12, and in FY 2012-13, its losses stood at a staggering Rs 81.98 billion. At the same period, its debt started rising fast and the profit-making venture became a loss-making company, with big private telcos exploiting its resources, network and infrastructure to grow their own business. Despite such a situation, the collective effort by the employees pushed up the company and in FY 2014-15 it posted a profit of Rs 6.72 billion. Despite the losses, the BSNL had the largest customer base in the country and at present it’s the fourth-largest telecom company in India.

Even after trying hard to fight back the corporate aggression, the BSNL couldn’t stay in the competition due to the lack of spectrum. It was allocated 3G spectrums in 20 out of 22 circles and in Delhi and Mumbai in 2010. Along with BSNL and MTNL, private players also got enough spectrum to make the Indian telecom market a bitterly contended one in the world. With the formation of Narendra Modi-led NDA government at the centre, the last nail of the BSNL’s coffin was hammered.

Since its formation, the Modi regime started promoting the interests of a chosen group of big comprador and crony capitalists who are generous donors of the BJP, and unleashed the juggernaut of privatisation to fulfil its commitments towards those big corporate entities, both domestic and foreign. By replacing the Planning Commission with Niti Ayog, the Modi regime started axing the BSNL and the MTNL. Calling the latter a liability and a loss-making central public sector enterprise (CPSE), the Niti Ayog advised the disinvestment of MTNL to raise funds. Forcing severe restrictions on the BSNL and MTNL, including a blanket ban on borrowing money from banks except for capital expenditure, the Niti Ayog didn’t discipline these companies financially, as it claimed, rather it restricted their growth and their attempt to break the shackles of losses and debts.

During 3G spectrum auction in March 2015, the government had fetched Rs 1 trillion. In that auction, Idea Cellular, Anil Ambani’s Reliance Telecom, Vodafone and Bharti Airtel had defended their existing spectrum holdings. Additionally, Tata Teleservices, Uninor (Telewings), Aircel and Mukesh Ambani’s Reliance Jio had secured additional spectrum. For the BSNL and MTNL, the battle became quite uneven and the government took no affirmative steps to protect the interests of these PSU telecom carriers.

It was eventually Ambani’s Reliance Jio, which was to become the slayer of the BSNL and MTNL due to its predatory pricing policy, cronyism and ability to use the government’s unbridled patronage. Formed in 2010, Reliance Jio was formally launched in September 2016, before the government’s 4G spectrum allocation in October 2016. The ubiquitous photograph of the prime minister was used in its advertisements and launch event to exemplify the connivance between the BJP and Mukesh Ambani’s ambitious telecom project.

To protect the interests of Reliance Jio, the Modi regime didn’t allocate any 4G spectrum to the PSUs BSNL and MTNL, despite all private players like Bharti Airtel, Vodafone and Idea Cellular being awarded 4G spectrum. In an uneven playing field, where all competitors are equipped with 4G spectrum, the BSNL and MTNL were forced to compete without spectrums. The Niti Ayog strongly disagreed to the views of the BSNL and MTNL employees that these companies too need 4G spectrum as the body claimed that the PSUs are bound to make losses with 4G spectrum. Even when the government is discussing the possibility of allocating 4G spectrum through another auction, the Niti Ayog’s red flag has become a barrier for these two PSUs to get 4G spectrums at a time when the government will auction 5G spectrums in mid-2019.

While 4G spectrums are denied to the crisis-ridden BSNL and MTNL, the government allowed Reliance Jio to race for monopoly in Indian mobility market. Reliance Jio followed a predatory pricing mechanism under the garb of “Welcome Offer”, which consisted of free calls and data. Though the Telecom Regulatory Authority of India (TRAI) regulations say that a company can provide such promotional offers for not more than 90 days, Reliance Jio continued it beyond that period even in 2017, by masking it as “New Year Offer” to lure customers from other operators. By selling its handsets under a “license to use” setup, Reliance Jio is showing greater loss in its account books for further tax evasion. This predatory pricing and blatant tax evasion by Reliance Jio not only affected the BSNL and MTNL, but also caused severe problems for other private telecom companies.

Most of the telecom companies saw a steep decline in revenues. Companies like Idea Cellular and Vodafone decided to merge, while Bharti Airtel tried to compete against the government-backed Reliance Jio on its own. According to CSLA, Reliance Jio has established its control over 80% of Indian 4G market and it’s going to have 100m user base of 4G feature phones by 2020. At the same time, Vodafone-Idea had incurred a loss of Rs 50.05 billion in the third quarter (October to December) of the FY 2018-19. The company’s loss during the second quarter (July to September) of this FY was Rs 49.50 billion. Vodafone-Idea has lost more than 35m customers during the third quarter of FY 2018-19 alone.

When a telecom giant like Vodafone-Idea is suffering such a fate even after having 4G spectrum, it’s no wonder that BSNL and MTNL will languish in the oblivion. Causing severe threat to national security, the Modi regime continues to abet Reliance Jio to commit more financial irregularities. The backdoor support provided by TRAI to Reliance Jio is evident from it remaining nonchalant over the blatant flouting of rules by the company. No other companies in the public or private sector enjoys such a full-fledged government support as does Reliance Jio.

When erstwhile telecom secretary JS Deepak complained about Reliance Jio’s predatory pricing to the TRAI, the government transferred him immediately to prevent any further criticism. The penalising of Deepak by the Modi regime bears the optics of a vengeance pursued to drive home the point that Reliance Jio is here to stay, grow and thrive at the cost of other telecom companies. When the senior bureaucrats like Deepak are muffled by the Modi regime to protect the interests of Reliance Jio, then it’s evident that the collaboration between these two entities, the Modi regime and Reliance Jio, can crush any other resistance swiftly as well.

It’s hard for the BSNL and MTNL employees to fight against this discriminatory policy adopted by the Modi regime. The strike action by BSNL employees in December didn’t break the logjam. The Modi regime is determined to not allow BSNL and MTNL perform and overcome the challenges that lie ahead for these companies, to prove the Sangh’s ideological standpoint that PSUs should be privatised for better management and competence, the logic that drove the anti-PSU scheme of Vajpayee era and continues even today.

The only way left for the BSNL and MTNL employees is to intensify their present struggle and unify the workers and employees of all telecom companies to build up a massive movement against the Modi regime’s agenda of promoting the growth of Reliance Group at the cost of PSUs. Building up an inter-industry solidarity movement of the employees and workers of the PSUs like SAIL, HAL, AAI, ONGC, etc, which are facing an immense crisis due to the Modi regime’s anti-worker and corporate appeasement policies, will definitely bolster the working class’s cause in the struggle. Only a strong, vibrant and larger working class and employees’ struggle against the Modi regime can halt the wheels of neo-liberal aggression. BSNL and MTNL employees must intensify their struggle to bring the Modi regime, which is acting as Reliance’s business development wing, to its knees and prevent the privatisation of these companies. Any delay in this struggle will help Modi and his coterie to sweep the election with a thunderous majority.

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