BSNL considers network upgradation, staff costs rationalisation to compete with private peers: Report

The government is considering several measures, including network upgradation and employee cost rationalisation, to improve operational efficiencies in Bharat Sanchar Nigam Ltd (BSNL) to help the state-run telco compete with its private peers, reported The Economic Times. As per the report, the measures that were proposed also include enhancement of sales and distribution and providing more value-added services.

BSNL Employee Cost

Employee cost rationalisation would include reducing the employee cost benefits which is key for the loss-making public sector telecommunication company, as per the report.

"We have to benchmark employee expenses with other telecom operators," one of the officials told The Economic Times.

Also Read: BSNL revival package: Cabinet approves ₹89,000 crore

As per The Economic Times, the staff costs at BSNL is at 38.4% of the total revenue in FY23. It has to be noted that the cost is still very high despite 78,323 people taking voluntary retirement after 2019. The staff cost covered over 70% before the 2019 revival package. BSNL currently employs around 59,000 people

"The employee cost has come down after VRS, but it remains high compared to private telcos, impacting the profitability of the company," an Official told The Economic Times

Meanwhile, the employee cost at the country's leading telecommunication company Reliance Jio is around 1.8% of its revenue while that of Bharti Airtel is about 2.3%. Even Vodafone Idea which is struggling financially has an employee cost of 4%.

"This is sharply higher when compared to private telecom operators," a second official told The Economic Times.

The government is also working towards enhancing the productivity of BSNL staff. BSNL and Department of Telecommunications (DoT) had signed a Memorandum of Understanding to improve the working culture in the state-run firm. A key performance indicators (KPI)-based management system was put in place to measure the productivity of the staff.

Network Upgradation

The Public Sector company is also lagging behind network upgradation. As per The Economic Times, BSNL, which ended December with close to 92 million users, is yet to start 4G services and is steadily losing subscribers to rivals such as Jio and Airtel that have almost completed their 5G rollouts.