The Committee appointed by the PMO to review the financial performance of PSU, BSNL has come out with some path-breaking recommendations for the struggling operator.

Among other recommendations, the panel has suggested that BSNL unbundle its last mile copper network to private operators. BSNL has always opposed such a move saying that the copper network is to be counted as one of its differentiator when compared to competitors.

However UK’s largest broadband service provider, British Telecom (BT) has unbundled its last mile network acknowledging that it will ultimately lead to increasing the broadband penetration. Even in India, apart from BSNL, private operators do not have a copper network as comprehensive as the PSU excluding in cities.  

Meanwhile the panel has also asked BSNL to target 30 million broadband subscribers within 3 years.

Importantly the panel has pointed out that the PSU is having overstaff to manage its operations. “BSNL needs to improve organisation performance and employee productivity substantially. Retire or transfer around 100,000 employees through best possible processes such as voluntary retirement scheme (VRS),”said the Committee.

It has asked the government to divest 30% of stake in the PSU to an Indian strategic investor or through IPO listing.

To manage expenditure related to call centre, IT and network, the panel has recommended that BSNL adopt a managed services model. On enhancing the procurement process, the panel suggested that BSNL should adopt methods such as -procurement, vendor rating and running contracts.

“Separate the post of the Managing Director/Chief Executive Officer (from that of the Chairman). Change the board composition to seven directors and allow the Ministry to interact only through the board, and not through day-to-day decision making,” added the panel recommending that eminent person from private domain head the PSU.

It has also asked BSNL to set up a separate subsidiary to hold undeveloped land bank (estimated at over 2.5 million sq.m. in seven key cities). It has also asked BSNL to spun off the tower business unit.