BSNL should cut staff count by a third and monetize the real estate treasure, suggests Sam Pitroda panel

A committee chaired by Sam Pitroda, and Deepak Parekh HDFC Chairman,  P J Thomas Union telecom secretary as its members, was constituted to assess the functioning of state-run telecom giant BSNL. Due to increased competition and expansion of new entrants in Indian telecom market BSNL may post losses in its balance sheet. There are several reasons behind poor functioning of this telecom PSU and being under government control decision making on various vital issues such as equipment procurement and network expansions etc gets delayed which eventually hamper growth.

Committee in its report suggested following organizational changes.

  1. Monetization of 2.5 million square meters of property assets in collaboration of experienced realty developers. Creation of separate subsidiary to manage the real estate treasure is also suggested in the report.
  2. BSNL’s total staff strength is more than 300000 and staff cost is a major hurdle. Report suggests reducing the staff by a third i.e. 100000. BSNL may finalize measures like voluntary retirement scheme (VRS) to accomplish the staff reduction.
  3. Induction of young talent to manage technology, services, sales and marketing. This will improve organizational performance. Also performance driven culture is required to be developed.
  1. Absorption of top brass from Indian telecommunication services (ITS) needs to be finalized without any further delay.
  2. Scrapping of the 93 million line GSM tender is recommended by the panel. Also it is recommended that BSNL may opt for a lease arrangement for telecom equipments which will reduce the capital expenditure and save the extra cost to hire expert young engineers to manage networks. Private telecos follow such leased model for their network expansions.
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