Dr T.H.Chowdary

Sri Pitroda has given well -argued recommendations to make the BSNL (which is on the path of sickness) healthy. They envisaged the cutting down of the redundant work force to the extent of one third of its present strength and outsourcing much of its network supply and management, a model that the BSNL’s rivals have successfully embraced to bring down costs and also speeding up the expansions required. The communist -inspired and controlled unions have vehemently opposed these recommendations. The minister who is already under siege because of alleged wrong -doing in the allotment of 2G spectrum in the Y2007/8 immediately gave in to the strike of the Unions to appear to be pleasant and sympathetic to the "workers". He agreed to refer the recommendations to a "Group of Ministers", thus delaying the health-treatment to sickness-contracting BSNL. Thus the labour union and the minister of questionable practices are together in bringing out a result which ultimately will be the irretrievable sickness of the BNSL. Its expansion schemes are on hold. It is losing market share continuously to its private sector competitors. Its profits are evaporating as artificial injections like access deficit contributions and such exactions from P-Telcos have been wound down. If its shares are offered to the public later and later, the sickness in the BSNL becomes more serious; the IPO will get less and less price per share. Thus the BSNL would have to be sold very cheaply or it may wither away by the combined actions of the ideology -inspired, leftist unions and no -ideology (but power) motivated ministerial management.

Dr T.H.Chowdary

The TRAI made a startling recommendations to the DOT that those who got mobile telephony licences in the year 2001 should now be asked to pay the spectrum fee matching what would be the final price for the 3G spectrum for which several rounds of auction had taken place in April -May 2010. The 3G spectrum auction is expected to get a revenue of over Rs.70,000 cr for all the states for which the companies bidding would be given the spectrum. Cell Telcos like Vodafone and Bharti Airtel etc., would have to pay over Rs. 15,000 cr if the TRAI’s recommendation is accepted by the government . The sums that are involved are indeed huge and this, while the Average Revenue Per User (ARPU) per month has been steadily coming down and in the case of some companies, it is as low as about Rs. 200 and the highest is no more than about Rs. 300/- . Cut throat competition has been bringing down prices fantabulously to as low as 29 paise per second. That the lowered prices are already telling upon the revenues of the companies and their profitability is evident from the published quarterly results for March 2010.