`IPO is one step closer to disinvestment`

Q&A: V A N Namboodiri

The Ministry of Telecommunications’ aim to float a Rs 40,000-crore initial public offering (IPO) of Bharat Sanchar Nigam Ltd (BSNL), which will be India’s biggest, has been vehemently opposed by the employee unions.

The BSNL Employees Union, which has the largest number of members among the company’s various unions, is joining the August 20 strike.

The union’s general secretary V A N Namboodiri tells Rajesh S Kurup the IPO is part of the government’s plan to sell the company to the private sector. Excerpts:

Why is your union joining the strike?

We have called for a token strike on Wednesday to protest against the government’s move to make BSNL a listed company. We are protesting against the proposed IPO. We are also highlighting another issue — the wage negotiation for group ‘C’ and ‘D’ employees.

We believe some unions are not backing the strike.

BSNL has around 12 employee unions and the BSNL Employees Union is the largest with around 150,000 members.

This strike is also backed by the second largest union, the National Federation of Employees Union, and another major union, the DMK-backed Telecom Employees Progressive Union.

The executive-level personnel are not backing this strike as it is also over the salary revision issue. Their salaries were revised earlier. The executive staff, however, will join the strike as we intensify it.

Does that mean you have plans to intensify the strike?

Yes. This is a token strike. The unions have decided to intensify the strike if the government goes ahead with the IPO. This will include direct action like indefinite strike.

But why are you against the IPO?

BSNL does not have to raise money from the markets as it has parked over Rs 35,000 crore in liquid cash with various banks.

This is sufficient for its capital expenditure and expansion. Being a debt-free company, BSNL can also borrow money on its own balance sheet.

Another issue is that there is no guarantee that the amount raised will be ploughed into BSNL. The amount will go to the government and this might not necessarily be used for BSNL’s expansion.

Don’t you think the IPO will be beneficial to BSNL as it will increase accountability?

We don’t think listing will help improve the company’s performance. For example, the listing of telecom PSUs Mahanagar Telecom Nigam Ltd (MTNL) and ITI has not done anything good for these companies.

You have also alleged that the IPO is an eyewash.

This IPO is nothing but one step closer to disinvestment, like in the case of Videsh Sanchar Nigam Ltd (VSNL).

Disinvestment is a negative word as everyone opposes it and so the government is proposing an IPO, which is likely to be followed by disinvestment. We don’t want BSNL to be sold to private sector groups. We don’t want BSNL to become another VSNL.