Our biggest problem is that half of revenues go towards staff salaries: R K Upadhyay

Interview with CMD,

R K Upadhyay: took over as chairman and managing director of state-run telecom company Bharat Sanchar Nigam Ltd (BSNL) in April 2011, one of its worst financial times. He says he’s now confident of arresting its decline through various measures, including renewed focus on landline and mobile services, sorting out procurement problems and outsourcing unutilised space and tower management. In an interview with Mansi Taneja, he speaks about the company’s future plans. Edited excerpts:

You have taken various initiatives since you took over the company, including a massive drive for all-round improvement in performance. How has that helped?
Revenue from services has shown improvement, though expenditure has also gone up because of inflation and other factors, including the wage bill. The decline has been arrested, our losses in the balance sheet might be of the same order or a little more but the fact is that there has been an improvement in revenue, a positive sign.

Various steps were taken last year, which will start yielding results in the current fiscal. There were problems in procurement for essential services. All that has been streamlined and supplies have started. We have also placed orders for 15 million GSM lines and it will be done in six to eight months. The project cost will be around Rs 5,000 crore.

For the past three-four years, BSNL could not place orders for GSM capacity expansion. What is the plan for further expansion after the current tender of 15 million lines?
According to our estimates, there will be demand for another 15 million lines. There is a provision in the existing tender where we can place a further order for 50 per cent of the total capacity. For the rest, we will come out with a fresh tender.

You have been focusing on government projects of late, for providing connectivity and telecom services. How many deals have you bagged?
We have got a Rs 280-crore deal from the customs department for providing telecom services over 10 years. Then, there is a project from the ministry of home affairs for connecting all police stations across the country, mainly for automation. We will be laying the network for it and the project cost is around Rs 220 crore; for IT connectivity, there will be another company.

Then, a Rs 40-crore deal with the income-tax department for our services and a project worth Rs 160 crore from Navodaya schools for connectivity. All these projects will enable us to increase our top line and reduce our losses over a period of time.

The Department of Telecommunications (DoT) had directed both BSNL and MTNL (Mahanagar Telephone Nigam Ltd, its counterpart in Mumbai and Delhi) to reduce staff in a targeted manner. What is the update on your plan for a voluntary retirement scheme?
BSNL’s biggest problem is that 49 per cent of revenues go towards staff salaries. That is why we are exploring all possible revenue streams, including land resources. The proposal for VRS is still pending.

What other new projects are on the anvil for increasing revenues?
We have chalked out a strategy to increase revenues by 10-15 per cent through various measures, including leasing out real estate, outsourcing operations, management of towers, and offering enterprise services. We also plan to make full use of our seven telecom factories. We have galvanising facilities in our units, used for tower manufacturing. We have had initial discussions with private players and will soon come out with an Expression of Interest on appointing a consultant for this.

Besides, we will be focusing on broadband services across all technology platforms.