Paper presented by Hon. Member of Rajya Sabha Sri. K Chandran Pillai in the one day Conference on Public Sector Telecom Services at BTH, Ernakulam on 14-08-2008.
Dear All,
Efforts to bring representatives of all the stake holders of the Public Sector Telecom Company and to identify the issues that are to be sorted out to ensure its continued existence is to be well appreciated. I too do it first.
Telecom sector has a unique status among the various industrial sectors, not only because of its importance as one of the basic infrastructure facility, but because of the un precedented technological advancement, convergence of communication and computers, convergence of VOICE, IMAGE and TEXT into DATA, emergence of integrated data networks and the internet, resultant integration of various information based services and the consequent possibility of restructuring and re-engineering of each and every service sector, the single major commodity which they deal with is information, etc. taking place in that area. The advancement in technology, that from electrical to electronic, to integrated circuits, to micro processors and micro chips helped in mass production and consequent price reduction combined with expanding market has contributed to unprecedented expansion of communication network and services. Cost of per line connectivity is reported to have been reduced from 50000 to 1000 with the transition from electro-mechanical switches and cable based system to the present micro-processor based wireless system. The present day expansion of telecom facility is attributed to the entry of private operators in the fray, according to an analysis based on formal logic. But, it is in fact a result of the technology change from electrical to micro-chips and micro-processors. It opened up chance for private capital to make quick bucks. I neednot go into those aspects as I know that those from Telecom sector will discuss those peculiarities for the consumption of the customers. But the effect of these changes on the other sectors of economic activities cannot go unnoticed.
History of Telecom development in India shows that before Independence the Technology was provided, naturally, by the British. Thereafter till the end of eighties, the technology came from almost all advanced nations like Britain, France, Itally, Germany and Japan. Note that not from USA. But, by the middle of 1980's, with the appointment of Mr. Sam Pitroda as the Chairman of Telecom Commission and the institution of C-DoT, his so called brain child, the Indian Telecom Market was opened to USA. Still some of the problems of this Technology shift from European to US haunts us. Our communication system conforms to European standards, while IT equipments available in the market conforms to US standards. One such glaring example is the common MODEM available in indian market, which is charged as for VOICE, FAX and DATA, but incapable of identifying the caller number due to the mismatch in the standards used for transmission of tone.
This shift from European to US has to be read with the leadership role of USA in the field of Computer Hardware and Software. All the first 5 software corporates are US based. That means by 1990, USA was somehow able to avert a huge crisis in its economy caused by the downward slide of its engineering industry, including automobile, market for which was captured by others like Japan. The leadership of USA in the area of communication technology, fondly renamed as information technology, which is one of the area with which US economy was sustained, with the increased flow of wealth from all the nations that started using computer hardware and software, was passively acceded to by others to avoid a collapse in the global capitalist economy with the a crisis in its leading one.
I need not tell you that Telecom switches are using software and that the size of the switch comes down with the increased use of software. Every piece of equipments used in information communication sector has a software component now. Software, once upon a time, the property of Tele communication sector alone was taken out of communication industry and is now supplied to it at huge cost, embedded in the equipments, which even the communication experts are unable to handle, the maintenance for which the producers or suppliers themselves are to be retained, a way of loot with proprietary systems.
We have to learn lessens from the dynamism with which the information technology industry was nursed and brought up, identifying innumerable number of uses and thereby business avenues. This appreciation is not meant to imitate them in their cut throat competition and unmindful exploitation of the society as a whole. We can use such dynamism for the well being of the society at large. The business model created in Software, the development of ready to use packages, identified for each and every area and aspect of information handling, howsoever minute it may be, has become one of the mainstay of the present day economy. But for this business model created by capitalism, the spread of information technology to this extend would not have been possible. This credit goes to them. But, the effect of this new found industry shall not go unnoticed. Wealth from all the other sectors, using information, is being siphoned away at the cost of those sectors and ultimately risking the very health of the economy. Health of any economy is dependent on balanced development based on primary sectors, where alone real wealth is generated.
Balanced growth of economy is alien to Capitalism. Its existence is based on constant upheavals and that is the trend behind the present day neo liberal policies. That is what we witness in share markets. Initial Public Offer of BSNL shares to the extent of 10% is under consideration, it is reported. Justification mooted out is the requirement of about Rs. 60,000 Crores for immediate expansion. History of Telecom in post independent India shows that it has grown without any budgetary support. On the contrary, it has supported even the wasteful expenditures of the Govt. It is worth while to recall the earlier assessment of Rs.1,60,000 crores required for expansion and the proposal for collection of licence fee from private operators to meet it and later conversion of licence fee into profit sharing to the extend of only Rs. 50,000 Crores and that too finally waived, how much is not known yet, the process of which commenced with Minister Sukh Ram, which shows the hollowness of such declarations. What exactly happened was that the private operators came to stay to compete with BSNL. The much trumpeted resource mobilisation has miserably failed. In fact made it a failure. You are aware of the further decisions of TRAI etc with respect to ADC, USO etc. Added to this is the fraud committed to loot the BSNL of its revenue.
Cash reserve of BSNL is reported to be Rs.50,000 Crores. (Remember the sale of VSNL having Rs. 2400 Crores of cash reserve for a meagre price of Rs. 1400 to TATA and consequent laments of the then minister when TATA withdrew that money for reinvestment in their own businesses which was the natural and accepted course for TATA. BSNL having Rs. 50,000 Crores in Cash reserve alone in addition to fixed assets like land and buildings at prime locations throughout India need not have any scarcity of funds. Link it with the yet another decision of the Govt to appoint private banks as EPF managers. Rs. 2,40,000 Crores is the figure. Why not the Govt itself or through the earlier fund manager SBI invest in telecom. Why not PSUs invest in other PSUs. Who is blocking it. The Govt. There is no justification or need for handing over the Govt and PSU funds to private and then private investing in PSU. Yes, there is yet another arguement that the vigilance of share holders alone will make the PSUs shred its lethargy and work properly. I am leaving this question to be answered by this house.
With all due respect to your sentiments and eagerness to protect the BSNL, I must warn you that your goal cannot be achieved in isolation, insulated from the reality that the threat to the existence of Public Telecom Service Company comes from its very owner the Central Govt itself. This warning is not to deter you from your endeavor to take steps to protect the company, but to impress upon you the seriousness of the threat. Disinvestment forms part of over all policy frame work of the UPA Govt (now free from the constraints put in by the left parties through CMP) to withdraw from service sector to leave it to the finance capital in the context of Imperialist Globalisation. The ideas behind Globalisation is to do away with all sorts of social security measures, job security, state control on the market inorder to give free hand for finance capital. Free market also means exit of small entrepreneurs, closures, mergers, cartalisation and finally share market crisis, often artificial and calculated and at times spontaneous. Therefore, no body can depend on the share market, without risking their savings. To achieve your objective, you must close ranks with all those who are interested in similar aims, protecting their work, their wages, a decent livelihood and social security.
As far as the customers are concerned, their immediate interest tends them to opt for the cheap and quality service. It is quite natural. BSNL faces the problem of organisational rigidity and lack of dynamism, inherent with a large nation-wide, vast organisation as it is. It may not be able to respond as quickly as others to the price variations brought by its competitors. But the customers, in Kerala, by and large, they are having a better social outlook, and are pro public sector, has to see to the long term interest as well.
On the part of BSNL business organisation, it has to strike hard to attain customer satisfaction. The lethargy shall not be tolerated. Mis-management, corruption, wastage of resources, if any, have to be put an end to. BSNL services are said to be far better than any other. But service delivery has to improve. From the notes circulated for discussion, I am to understand that you are discussing the possibility of diversification of activities, products and services as well. Lateral and vertifical diversification, which means dynamism, is a means of sustenance of an organisation in the competitive environment. Telecom services in Public Sector shall have a role to play in the well being and betterment of our society.
Wish you all success and hope that concrete suggestions and decisions will come out of this forum.
K Chandran Pillai (Member, Rajya Sabha).
Dt: 14-08-2008.
1 comment:
Well said.
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