OpinionOpinion | Why BSNL May Lose Its Dominance In...

Opinion | Why BSNL May Lose Its Dominance In Rural Areas Because Of VRS

-


New Delhi:

The government-owned Bharat Sanchar Nigam Ltd’s (BSNL) voluntary retirement scheme (VRS) is moving towards a great success. As per the latest report, more than 70,000 employees have already opted for it. The number is expected to go up in the last few days. December 3 is the deadline for applying for VRS.

Let us assume that nearly 75,000 leave the company through VRS scheme. It will have a significant impact on the financials of the company as more than 70% of its revenue goes towards salary of the employees. This is very high compared to its private competitors. For example, only five per cent of Bharti Airtel’s revenue goes towards salary.

The company is expected to save about Rs 7,000 crore per annum, if about 75,000 employees take VRS. However, the big question is whether it will be enough to revive the ailing PSU.

“Once the VRS process is complete we will have to do a proper analysis. BSNL is very efficient in Southern and Western states. As per our initial information, number of employees taking VRS from these regions are much higher. If this remains till last, it will be difficult for the management to restructure remaining manpower and there may be an impact in the working of the PSU,” said a senior official of the department of telecommunications (DoT).

Currently, BSNL’s advantage is that it is strong in rural areas compared to its competitors. However, one of the reasons for it is that it has a number of employees even in remote areas where private players don’t have network. However, this advantage may go away as BSNL looks to reduce its manpower by more than 50 per cent.

When BSNL launched its services, its USP was that its services were available in rural areas. For many years, it was the only network that was available in remote areas.

Later, private players started providing services in remote areas. However, their penetration was limited to certain areas. That is the reason that BSNL was the first choice for customers outside metros and big cities. Now, with reducing manpower, BSNL’s advantage will go away.

BSNL is strong in fixed-line services. It has nationwide network of Optical Fibre cable (OFC). It differentiates BSNL from its competitors. In fact, if BSNL had concentrated only on fixed-line services, it would have been a great source of revenue and combined with Wifi network, BSNL could have been much ahead of its competitors.

Also Read: Opinion | Why India’s Decision To Opt Out Of RCEP Agreement A Welcome Step?

However, it requires a lot of manpower to maintain landline network. Now, it will be a challenge for BSNL to maintain its fixed-line services. It may be noted that fixed-line services always have higher average revenue per user (ARPU) than mobile services.

Reducing manpower is good for BSNL as it will reduce financial burden on it. However, if it is not handled properly, it may have negative impact on it in the long term.

Disclaimer: The opinions and facts expressed within this article are the personal opinions of the author. They do not reflect the views of News Nation. The NNPL does not assume any responsibility or liability for the same.



For all the Latest Opinion News, Manoj Gairola News, Download News Nation Android and iOS Mobile Apps.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

Biden Will Hold Separate News Conference From Putin After Summit

After President Biden meets his Russian counterpart on Wednesday, the two men will not face the press at...

Pandemic Bakers Are Going Pro

Before the pandemic, Max Kumangai spent his Saturdays singing and dancing his way through back-to-back performances of “Jagged...

G7 Live Updates: Biden Urges Leaders to Counter Chinese Influence

Here’s what you need to know:President Biden with Chancellor Angela Merkel of Germany on Saturday in St. Ives,...

The G7 leaders get down to business, taking on climate change and the pandemic.

To varying degrees, the member nations, all large wealthy democracies, will be looking to create a united front...

To Counter China’s Belt-and-Road, Biden Tries to Unite G7

PLYMOUTH, England — President Biden urged European nations and Japan on Saturday to counter China’s growing economic and...

Bitcoin and Encryption: A Race Between Criminals and the F.B.I.

Law enforcement also has an advantage when it gets ahold of digital devices. Despite claims from Apple, Google...

French Political Leader Pelted With Flour During Protest

Jean-Luc Mélenchon, a far-left political leader in France and a likely high-profile candidate in next year’s presidential election,...

Must read

Biden Will Hold Separate News Conference From Putin After Summit

After President Biden meets his Russian counterpart on...

Pandemic Bakers Are Going Pro

Before the pandemic, Max Kumangai spent his Saturdays...

G7 Live Updates: Biden Urges Leaders to Counter Chinese Influence

Here’s what you need to know:President Biden with...

The G7 leaders get down to business, taking on climate change and the pandemic.

To varying degrees, the member nations, all large...

To Counter China’s Belt-and-Road, Biden Tries to Unite G7

PLYMOUTH, England — President Biden urged European nations...

You might also likeRELATED
Recommended to you