A Step in the Wrong Direction

October 20, 2005 is one date which Group A telecom employees working in BSNL and MTNL would like to forget. Around 1,300 employees were not allowed to enter their offices as their rooms were locked. Even their vehicles were withdrawn, causing them further inconvenience. The remaining 900 employees would also have met the same fate had they not got a stay from different courts.

This incident raises a lot of questions to be answered by secretary, DoT as he is spearheading the absorption process. First, why did things come to such a situation where corporate offices of both BSNL and MTNL were locked for these employees? Second, it raises question mark on the absorption process followed by DoT as only 16 ITSA officers opted for absorption and this is even less than one percent of the total base. The biggest question that arises is that when consultation process was followed for Group B, C, and D level employees why was it not followed in the case of Group A level employees.

The Chain of Events
Why 1,300 ITSA employees of BSNL/MTNL were ordered to join DoT without caring for operational and financial health of these companies. The repatriation order was only valid for those who had not obtained a stay from different courts. On the evening of October 19, 2005, BSNL and MTNL CMDs issued relieving orders to 1,300 officers through e-mail. The very next day, when these officers entered their offices to their utter surprise their offices were locked and they were not allowed to enter. This incident was humiliating for these officers as they have been working in these organizations for a long time and have been heading their respective departments.

On October 20, Indian Telecom Service Association (ITSA) challenged the October 18 order in the Central Administrative Tribunal (CAT) at Allahabad. On October 21, ITSA got status ante (i.e. to restore the same status as that of 17th October, 2005). Despite receiving the CAT order, the DoT Secretary took his own time and finally asked both the CMDs on November 2, 2005 to honour and implement all court judgements. On November 8, BSNL CMD took back all issues and employees where allowed to rejoin whereas MTNL CMD did it only on November 17, 2005.

So what was the net impact for BSNL and MTNL during this duration? The corporate offices of both MTNL and BSNL were working without ITSA officers in duty. Even BSNL offices in Rajasthan and Maharashtra were badly affected whereas in other states, the attendance of ITSA officers was minimal. Due to this, there was no movement in terms of commissioning and deployment front on the ongoing projects. Even existing services were not running smoothly and there were major hiccups as it was not ironed out in the absence of top and middle level managers and technical staff in these organizations. Even new projects where further delayed and the situation is likely to remain the same till the time the absorption issue is sorted out in the best interest of the employees.

A Loss of Rs 2,124 cr: who is responsible?
	BSNL loses MTNL loses BSNL and MTNL loses	Rs 1,684 crore Rs 440 crore Rs 2,124 crore
	New Projects Delay 60 mn GSM Tender Transmission Projects Broadband Multiplay Tender NT DTAX Tender IP-Tax tender CDR Billing & CRM tender CDN tender Interest on unutilized Capex Investment of Mobile Services Fixed Line Services Internet and Broadband Services	Rs 600 crore Rs 200 crore Rs 120 crore Rs 120 crore Rs 22 crore Rs 72 crore Rs 30 crore Rs 400 crore Rs 26,000 crore Rs 100 crore Rs 10 crore Rs 10 crore

Loss in Revenue for BSNL and MTNL
According to SS Sirohi, president, ITSA, "The absorption issue has resulted in a total loss of around Rs 2,124 crore to BSNL and MTNL. This is a direct loss but if one takes into account indirect losses, the total value comes around Rs 3,000 crore." And continuation of this uncertainty will lead to further losses, added Sirohi.

According to ITSA, BSNL's loss is estimated in the range of around Rs 1,684 crore whereas MTNL's loss is estimated to be in the range of around Rs 440 crore. In BSNL, there was loss on mobile front due to delay in ongoing projects Even loss is expected in fixed line services, Internet services and broadband services.

On the mobile front, there were a lot of problems in terms of network rollout and commissioning. In the east zone, 3 mn lines commissioning was due on Ocotober 10, 2005 but it is still pending. In the west zone, 3 mn rollouts were to commence on October 2005 but now it has been rescheduled to December 2005 . In the south zone, 4 mn were to be commissioned on August 17, 2005 by the Communications Minister but there was a negligible rollout.

On the broadband front there has been a drop in number of connections from around 4,000 customers additions per day, it is now at around 2,500 customers per day. Even corporate leased line customers had to face the wrath of network outages and they had no other option but to opt for back up redundancies through private operators resulting in loss of revenue as well as credibility for both BSNL and MTNL.

There was massive loss due to delay in new projects and this is estimated by ITSA in the tune of around Rs 1,584 crore. All the mega plans of BSNL have come to a standstill like: 60 mn GSM tender, one of the largest tenders in the world which will help BSNL occupy the number one slot. The delay in processing of BSNL's 60 mn tender will lead to a loss of around Rs 600 crores. Other projects which have been affected due to employee unrest are transmission project, broadband multi-play tender, NT DTAX tender, IP-Tax tender, CDR billing and CRM tender, CDN tender, and interest on utilized capex investment of Rs 26,000 crore. All this comes to a cumulative loss of around Rs 1,564 crore.

In the case of MTNL, business losses were noted in the case of GSM, broadband services, CDMA and virtual calling cards. 4 mn GSM targeted for October 2005 shifted to December 2005. 2 mn broadband/CDN tender opening has postponed indefinitely. Around 400,000 each CDMA lines in Delhi and Mumbai targeted for October 2005 has been indefinitely delayed.

The overall loss in revenues for BSNL and MTNL is irreparable. Apart from the losses, the faith of corporate customers took a beating and this will take time as it is not easy, in view of the aggressiveness of the private telecom players in the country. Apart from this, the overall employee will take a beating due to one month drama titled 'DoT absorption process.'

Why Change in Approach?
It is a big irony that the Minister and the Secretary had been talking about the merger initially and synergy later for BSNL and MTNL without talking about absorption of ITSA officers as it is a far bigger issue. As any merger or synergy cannot happen without the completion of the absorption process.

It is very difficult to digest why DoT was in such a great hurry to implement the absorption process before October 1, 2005 when it had full five years to initiate absorption process even for Group A officers. It seems from last five years there was no meeting on absorption. And the first meeting between ITSA and DoT happened only on on 10th September 2005 that to on a written intervention of Shakeel Ahmed, minister of state, government of India.

It is also an irony that when consultative process was applied for Group B, C, and D employees. Why similar consultative process was not conducted for Group A employees and why was the process started so late.

The absorption process for Group C&D employees was finalized in 2002 where government offered attractive terms and conditions. In this process, around 350,000 employees were absorbed in 2002. Even in case of Group B employees absorption attractive terms and conditions was offered with protracted negotiations over 2 years. And in this level around around 45,000 employees were absorbed. Out of this, around 3,000 employees in Group B, C, and D have still not opted for absorption and still deemed on deputation.

ITSA demands on absorption issue
	Parameters	Demands	DoT Response
	Similar pay scales and service conditions in BSNL/MTNL	HAG (E9+) and SAG (E9) are same in both BSNL/MTNL. Therefore, the logic of giving different pay scales at lower levels (NFSG, JAG) due to pension liability of government in the case of BSNL but not so in the case of MTNL, does not hold good	No assurance.
	Continuity in pay scales from E9 to downwards for the officers	The demand is natural as the pay scales should follow sequential grades. There is an apprehension that vacant IDA pay scales in the PSUs may be used at a later stage for lateral entry and will invite litigation on the matter of superiority and promotions, indication of which already exists in MTNL.	No assurance.
	Special Allowance (SA) of 50 percent as per the model already agreed	Model already agreed vide CMD BSNL letter dated 26-09-2005 based on communication from Secretary, Telecom should be implemented. This proposition will provide a justifiable @38% rise as on 01-10-2005, after adjustment of losses due to HRA/perquisite tax. The proposed increase in salary in still lower than the increase provided to other cadres absorbed in these PSUs. However, the SA should be outside the limit of 50 percent ceiling of perks and allowances set by DPE guidelines.	25 percent agreed.
	Ad-hoc payment already made for working in PSU should not be recovered.	This payment has been made for doing works done in PSU environment. There is no logic for recovery. Moreover it was never linked with absorption, while being sanctioned.	If small group is absorbed in DoT then it would not be recovered otherwise it will be recovered.

	Promotion Policy has not been framed so far. Time bound functional promotions should be given up to E9 (STS-4 yrs, JAG-9 yrs, NFSG-13 yrs, SAG-17 yrs). Time bound financial up gradation every 5 yrs from E9 onwards with functional up gradation depending upon availability of posts. The number of years for purpose of promotions to be counted from 1st January following the year UPSC exam.	The demand for time bound promotion up to SAG (E9) level is as per the prevailing situation in Govt. The HAG promotion to be given in 4-6 yrs after SAG. As the remaining service after HAG shall be about 10-12 years, there is a need to have at least one additional promotion above HAG to be given in 4-6 years time. The scale should be given every year.	Get absorbed and then we will decide.
	No lateral entry for the functions currently being handled by ITS officers	There is no requirements for lateral entry as ITS officers are well experienced and qualified to handle the currently allotted jobs/functions. Lateral entry will affect the aspirations and promotion avenues.	Not agreed.
	Reservation of board level posts for ITS officers	ITS officers could aspire for the posts up to members of Telecom Commission (Secretary level) while being in governement. In order to meet the legitimate career aspirations and for professional management of MTNL/BSNL, these posts should be reserved for ITS (absorbers/non-absorbees) officers. ITS have been holding these posts so far and we are only asking for protection of existing career progression. The current eligibility criterion for selection makes these posts open to outside applicants also. Incumbent CMD (RSP Sinha) and Director (B Shivkumar) – HRD in MTNL are current examples of entry of non-ITS. Therefore, the postings should be done by a search committee in DoT, as was being done for MTNL for many years. Government has powers to exempt any PSU from the purview of PESB any time.	Not agreed.
	Option should be continue in DoT rather than for government service. Allocating and en-cadreing various ex-cadre posts. Presently handled posts/functions should remain en-cadred.	In order to meet promotional aspirations of non-optees, all the en-cadred posts as on 01-10-2000 shall remain en-cadred to ITS. Efforts may also be made to en-cadre various telecom related posts in other ministries.	100 employees will be accomodated and rest will be kept in surplus.

	Modifications in 37 A to ensure payment of pension and medical benefits from Government funds for the service rendered up to the date of dis-investment beyond 51%.	Suitable modifications may be done in Rule 37 A (para 25) to ensure payment of pension beyond 51% disinvestments of government equity. 5 years benefits in service shall be given in qualifying service and pension paid accordingly. Government should modify the gazette to address this demand. Government guarantee about extension of medical benefits should also be provided in respect of previously retired employees and serving up to the date of such disinvestments.	No modification in rule but a leeter will be given.
	Pro-rate pension to be paid under the rule 37 (to be paid by the government) from prospective date. Suitable compensation to the officers who have rendered less than 10 years of service. Medical benefits to be ensured after retirement.	The pro-rata pension should be paid from the prospective date of account for the full service rendered by the officers in the government. Provision of pro-rata pension on the retrospective date is loss of qualifying service by 5 years, which is bad in law. The inter-se seniority shall, however, be maintained.	No modification in rule but a leeter will be given.

But the same exercise was not followed by DoT in case of Group A employees. When BSNL was corporatized on October 1, 2000 every employee was given a formation memo, which said all employees will be given permanent absorption in these PSUs after finalizing suitable terms and conditions. So, instead of finalizing suitable terms and conditions with inbuilt protection of current service conditions, the government moved in a hasty manner and unilaterally decided to dictate certain terms and conditions for absorption in PSUs without giving any opportunity to Group A officers for dialogue or negotiation despite persistent request with DoT Secretary and Minister of Communications.

About ITSA
ITSA is an association of Group A central civil services employee working in the Department of Telecomunications (DoT), BSNL, MTNL, and TCIL. The employees work in these companies as director, DDG, senior DDG, joint DDG, advisor, member, DGM, GM, CGM, and executive director. They work in different departments like policy formulation, planning, deployment, marketing, and commercial.

The absorption process has affected around 2,200 Group A employees of which around 1,800 work in BSNL, 250 in MTNL, and 150 in DoT and TCIL.

The Demands
On February 2, 2005, the government got the cabinet approval for the terms and conditions for absorption of Group A officers in BSNL and MTNL without consulting them and it was done in a secretive manner. These conditions were found to be degraded and demeaning and full of ambiguity. It was noticed that there was loss of payment in terms of emoluments and degradation of promotional avenues in the government.

For those who join BSNL and MTNL, the three main demands are pay and emoluments, promotional avenues and career progression, and security of pension/continuity of government pension, says SS Sirohi.

For those who opt for government, they should be deployed gainfully in DoT for all existing telecom functions that they have been discharging. In case they are not absorbed with DoT, they should be accomodated in other ministries for telecom related functions after adjusting these offices against such posts. And the remaining officers should be gainfully utilized by temporarily keeping them on deputation to these PSUs keeping their service condition intact until the government is able to redeploy them.

About their next course of action, Satish Sharma, general secretary said, "We are not going to sign inferior conditions and we are not following the path of agitation as it causes inconvenience to common man."

Conclusion
Recently BSNL announced FY 2004-05 results and it was encouraging both in terms of revenue as well as profits. Even the company is giving a tough fight to private players on the mobile front. So, why is government bent on creating hurdles for the company thereby creating problems in its working. Is it not a deliberate move to bring down the valuation of BSNL and MTNL so that it can be sold at a lower level whenever the government plans to do it in future? Is it not a deliberate move to help private operators increase their market share by delaying expansion projects, which takes a lot of time in BSNL and MTNL? Is it not a deliberate move to lower morale of ITS officers so that a way is created for IAS officers in the top positions whether in the circle level or corporate level in terms of policy formulation.

All these issues have to be thrashed out in the well being of BSNL and MTNL. Any further delay in the absorption process will be detrimental for all parties involved in the process. The ill feeling of employees cannot be erased easily and so consultative process will come to rescue with the formation of high powered committee with representations from Group A officers in a time bound manner so that everybody benefits including Group A employees, BSNL, MTNL, DoT, and public at large. Any wrong move can kill public giants BSNL and MTNL and it would not be good for the Indian economy.

Pravin Prashant

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