Experts say corporatization is not a magic wand. Just converting two departments, the Department of Telecom (DoT) and the Department of Telecom Services (DTS), into a company called Bharat Sanchar Nigam Ltd (BSNL) does not change the employees, as the business remains the same. Though many consider this process to be mechanical, a lot will depend on the corporate structure of the company, the board of directors —both external and internal, the balance sheet of the company, and the debt-equity ratio.

Formed on 1 October 2000, BSNL inherited 362,000 employees and a gross capital asset of Rs 75,000 crore (as on 31 March 2000). AF Fergusson, the consultant for the corporatization accessed the market value of the company to be worth Rs 250,000 crores, with a net worth of Rs 68,000 crores. A giant in the telecom sector, BSNL is a now a major force in the corporate world, trying to establish its new image.

TH Chowdary, the first CMD of VSNL, says, "BSNL can become a performing commercial entity just like any enterprise, if its board of directors and the CMD are competent, independent, forward looking and daring. Most importantly, it is the vision and leadership qualities of the first CMD that will determine the character, competence and progress of BSNL. Unless the old mind-set, the business-as-usual, and non-accountability attitudes of the staff are changed, the corporatization of DoT will only be window-dressing. In fact, it will be a fraud to mislead others to think that the former government departments have now become a corporation like British Telecom or Korea Telecom or Telia."

In the present structure, there is no difference between DTS, DoT and BSNL. The structure more or less remains the same and even most of the designations of the top management are the same. A lot will depend on AF Fergussons who laid the objective of corporatizing DTS, along with NM Rothschild and JB Dadachanji. Presently, the consultants are reviewing the organisation, commercial accounting and finance of BSNL and are planning to submit the report by 31 December 2000.

There are numerous issues that BSNL has to grapple with but some of the important issues, according to TH Chowdary, is defining its mission, preparing for competition, treating users as customers and not as prepaid subscribers, becoming accountable for financial and service performances, understanding the money part the of business—raising capital, servicing it; earning revenues through traffic and not rentals, increasing productivity, getting away from voice centric revenue, submitting to independent regulation without the protective armour of government statutes, proper accounting and financial analysis.

Organisation Structure

Initially, a board was constituted prior to 1st October, as certain functions had to be carried out. Subsequent to 1st October, the regular board has come into position and is fully operational. The corporate structure is in place. All the things are in position, not only in the head office, but also in the circle, says DR DPS Seth, CMD, BSNL. There are five directors: director (finance), director (planning), director (operations), director (commercial and new services) and director (HRD), who will be reporting to the CMD.

Any further expansion or modification of the board would be done at a later stage, as and when the government decides to do so. The external directors are still to be appointed. This would bring more clarity to the organisation structure.

Two new groups have been incorporated—the operations, & the commercial and new services group. The commercial and new services group was created, as there is more stress on new services in BSNL. The operations group will help in providing better services by keeping the systems up and running, thereby providing a more reliable service.

Debates are still on about how to club the different lines of business that BSNL operates. Dr Seth’s view is to go on the basis of units based on different business lines, irrespective of the location. There is another option of clubbing the different lines of business on the basis of geographical options. So, a model is yet to be worked out which will lay the true foundation of BSNL.