Governance Issues Related to the Decline of BSNL in Recent Years

Abstract

The Process of Liberalization of the Indian economy had begun in 1991, and the National Telecom Policy 1994 was the earliest attempt at the deregulation of the National Telecom Monopoly. As a departure from the general practice of awarding mobile license first to the incumbent fixed line operator, the government had issued licenses to private players first. BSNL and MTNL (The Metro operator for Delhi and Bombay) were promised spectrum licenses as the fourth operators in India. Hitherto the telecom services in the country was met by the Department of Telecommunications (DoT) under the Ministry of Communications (MoC) legalized as a monopoly under the Indian Telegraph Act 1885. In 1998 MoC decided to split the DoT into a Department of Posts (DoP), Department of Telecom Services (DTS) and a Department of Telecom Operations (DTO). The (MoC) merged the functions of DTS and DoP, and announced the formation of Bharat Sanchar Nigam Ltd (BSNL) which took over all the functions of DTO. It must be stated here that BSNL started with an obvious handicap, as the private players had already established certain benchmarks for marketing and service delivery. BSNL on the other hand was a PSU; it had neither private sector liberty of operations nor special dispensation from Government of India, but had the downsides of both.