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CHAPTER 3

OVERVIEW OF TELECOMMUNICATION SECTOR IN

INDIA AND BSNL SALEM SSA

3.1 Evolution of Indian Telecommunication Industry in India

During British Raj, Rajdhani of East India Company was at Calcutta and then

the capital got shifted to Delhi in 1911 by Lord Hardinge and gradually the power

center was shifted to Delhi and continued to be capital of India and after

independence, New Delhi became the capital of India. When telecom operations were

first started, PWD ran the business with headquarters at New Delhi. Then, the control

of telecom operations was gradually transferred from Public Works Department

(PWD) to Director General Postal and Telegraph (DGP&T), from DGP&T to

Department of Telecommunication (DOT), from DTO to Department of Telecom

Services (DTS) and finally landed in Bharat Sanchar Nigam Limited (BSNL). The

head quarters of telecom operations during all these years of transition was New Delhi

and for BSNL and Mahanagar Telephone Nigam Limited (MTNL) after their coming

into existence also, still New Delhi continues to be the head quarters.

During pre-independence days as far as telecom operations are concerned, the

four metros Delhi, Calcutta, Bombay and Madras were given special status and after

independence also it continues. As on today, telecom operations in Mumbai and New

Delhi Metropolitan areas are covered under MTNL, where as separate Telecom

Operation Circles were created to cater for Chennai and Kolkata Metropolitan areas,

which came under BSNL.

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BSNL is fully owned Government Public Sector Unit (PSU), offering wire

line, wireless, data and long distance services on pan India basis except Mumbai and

New Delhi, which come under MTNL jurisdiction. Each state in India is named as a

Telecom Circle which is called “Primary Switching Area” and one or more Revenue

Districts of the state circle are grouped together to form a Telecom SSA (Secondary

Switching Area).

The total number of executives working in BSNL (entire country) are around

48,420 and there are around 2,497 executives working in Tamil Nadu Telecom Circle

alone. Some under developed / far flanged / border telecom circles may have less

strength of executives when compared to other telecom circles. Altogether there are

26 Circles in India and Tamil Nadu Telecom Circle (consisting of Tamilnadu state

and Puducherry, except Chennai Meropolitan area) has 17 SSAs. The various

historical events of Indian Telephone systems are presented in Table 3.1.

Table 3.1 Historical Events in the Evolution of Telecommunication

Sector in India
Year Events
November The first Experimental Electric Telegraph Line was started between
1850 Calcutta and Diamond Harbour.
October 1851 The Line completed and opened for East India Company‟s traffic.
April 1852 Dr. O‟Shaughnessy‟s report on successful working of the
experimental Line landed before the Bengal Govt.
November Construction started for 4,000 miles of telegraph lines connecting
1953 Calcutta and Peshawar in the North via Agra and Bombay through
Sindwa Ghats, Bombay and Madras in the South as well as
Ootacamund and Bangalore.
October 1854 The first Telegraph Act enacted.
February 1855 Electric telegraph opened to public traffic.
1857 The „Mutiny‟. Electric Telegraph saved India‟ – Dalhousie.
1858 First Indo-Ceylon cable laid
January 1865 First Indo-European telegraphs communication effected.
1867 A new cable laid between India and Ceylon.
Contd…
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Table 3.1 Historical Events in the Evolution of Telecommunication Sector in

India (Contd…)

Year Events
1871 International Telegraph Conference at Berne and Rome.
October 1872 Interference to Telegraph Working by Magnetic Storm.
1873 Duplex Telegraphy introduced in India between Bombay and
Calcutta
1873 Indigenous manufacture of cables for river crossing by Telegraph
Workshops, Alipore.
August 1875 The first Private Telephone line supplied by the Telegraph
department.
August 1877 Indian Telegraph Department erected telegraph line between
Srinagar and Gilgit on behalf of the Maharaja of Kashmir.
1878 For the first time (except the first year) the receipt of the Indian
Telegraph Department exceeded the expenses, netting a surplus Of
Rs. 182,128.
1880 I.T.D. transferred responsibility of the Ceylon Telegraph System and
offices to the Ceylon Government.
November Licenses granted to Private Companies to operate Telephone Systems
1881 at Madras, Bombay, Rangoon, Calcutta.
January 1882 Opening of telephone exchange at Bombay.
October 1885 Upper Burma Campaign – I.T.D. helps in providing communications
for swift advance. Introduction of Quadruplex telegraphy and
copper wire for transmission.
1886 Copper wire for transmission between Bombay and Madras
Instead of iron wire.
1887 Facilities afforded to Indian Meteorological Service for
communicating „Storm Signals‟ to all places.
1888 Post Office and Telegraph Department combined as quasi-
commercial departments.
January 1889 Death of Dr. O‟Shaughnessy at Southern India.
1892-95 Construction and control of Telegraph System of Kashmir State by
I.T.D.
1895-96 Phonograms introduced for the first time at Bombay and Calcutta.
1902 First wireless telegraph station established between Saugor Islands
and Sandheads.
1903 Field Telegraphs for Sikkim, Tibet.
1903 Re-organisation of Superior Establishment in Telegraph.
Departmental Wireless Telegraph introduced.
1904 Wireless Telegraph introduced between Elephant Point and Amherst.
1905 Control of Telegraph Department transferred from P.W.D. to
Commerce and Industry Department, except for matters connected
with Buildings and Electricity.
Contd…
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Table 3.1 Historical Events in the Evolution of Telecommunication Sector in

India (Contd…)

Year Events
1906 Baudot system introduced between Calcutta and Bombay, and
Calcutta and Rangoon.
August 1907 Central Battery working of telephones was first introduced in
Kanpur.
December Women signalers employed for the first time.
1907
1907-08 Wireless Telegraph working between Diamond Islands and Port Blair
were successful during the nights of cold weather.
1908 Wheatstone working between London and Calcutta, Madras and
Rangoon.
1909 Wireless Telegraph Traffic was maintained with ships at-sea from
Calcutta stations at Diamond Island, Table Island, etc.
April 1910 Birth of Technical Branch as a separate organization for dealing with
the technical matters under Electrical Engineer-in-Chief.
December Telegraph Department awarded a gold medal in the United Provinces
1910 Exhibition held at Allahabad.
1910-11 Introduction of Circle Scheme in the department and
decentralization.
1912-14 Amalgamation of Postal and Telegraph Department under a single
Director-General. Reversion of control of P&T again to P.W.D.
1913-14 First automatic exchange at Simla with a capacity of 700 lines with
400 actual connections.
1914-18 Production of war materials by Workshops.
April 1919 Lady operators employed in Simla Exchange.
1920 Madras-Port Blair route for Wireless Telegraph opened.
May 1921 Recurrence of Magnetic Storm after a period of 50 years. Telegraph
Traffic in south India interrupted.
August 1921 National Cash Registers introduced in Calcutta C.T.O. for the first
time.
1921 Continuous wave transmitters for wireless telegraphy replaces the
spark transmitters.
1921 Introduction of R.A.X. at Poona.
1922 Department erected a line for Tibetan Government from Gyantse to
Lhassa.
1923 Long distance dialing (90 miles) introduced between Lahore and
Lyallpur.
1923 First Trunk Telephone Circuit in Burma established between
Rangoon and Pegu.
1923-24 152 questions relating to Department were asked and answered in the
Legislative Assembly.
1924 Floods and cyclone interrupted Telegraph Traffic throughout India.
1st April 1925 Accounts of the Department re-constituted on the basis of a full-
fledged commercial unit.
Contd…
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Table 3.1 Historical Events in the Evolution of Telecommunication Sector in

India (Contd…)

Year Events
1925-26 Conversion of Delhi Manual system to Auto System. Deluxe
telegrams for greeting messages with foreign countries introduced.
23rd July 1927 Radio-Telegraph started working between U.K. and India. The
beam station at Kirkee and Dhond opened by Lord Irwin and
greetings exchanged with the King of England.
May 1933 Radio-Telephone communications between England and India
opened by India Radio and Cable Communication Co. Special Trunk
Exchange was installed at Kirkee.
December Indo-Burma Radio-Telephone service started functioning between
Madras and Rangoon.
1936-37 Use of Trunk Lines for broadcasting programmes introduced.
1937 Burma and Aden Telegraph Systems, which were a part of Indian
Telegraph System, separated.
1938-39 Construction of short wave and medium wave wireless telegraph
receivers in a number of stations and direction finding stations at
Gaya and Allahabad.
1940 Introduction of „Urgent Private Inland Trunk Calls‟. Overseas
Telephone Service temporarily suspended due to war conditions.
1942 Bombay Australian wireless Telegraphic service inaugurated.
February 1942 Bombay-China Wireless Service inaugurated. Training center at
Calcutta transferred to Jabalpur.
1942 The Bombay Telephone Workshop was taken over by the I.T.D.
1943 The Jabalpur Telegraph Workshop started.
1943 The Bombay, Calcutta and Madras Telephone Systems were taken
over by I.T.D.
1942-47 Telecommunication Development Scheme came into operation.
A Telecommunication Development Board was set up.
August 1944 Bombay-New York Wireless Telegraph Service was commissioned
into service.
September Second civilian outlet to U.K., Delhi and London Wireless Telegraph
1944 Service inaugurated.
1947 India was represented at the important Atlantic City International
Radio Conference.
1947 Direct Telephone link to Kashmir and Assam.
1947 The late Sardar Patel launched Jalaprabha on Telephone Carrier
Channel and Wireless.
1st June 1949 Introduction of Hindi telegram in Devanagari script.
December „Own Your Telephone‟ Scheme inaugurated.
1949
1949 Wireless Station commenced functioning at Srinagar.
1949-50 State Merger Scheme; the P&T gradually took over the respective
State P&T Systems.
Contd…
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Table 3.1 Historical Events in the Evolution of Telecommunication Sector in

India (Contd…)

Year Events
January 1950 India-Afghanistan Wireless Telegraph Service inaugurated. Radio-
Telephone Service between India and Nepal inaugurated.
May-June Coastal Wireless Stations at Karwar, Ratnagiri and Mangalore
1950 started.
October 1950 The Wireless Telephone Service between Indonesia and India
opened.
November Private Priority Telegram introduced.
1950
1950 „Own Your Telephone Exchange‟ Scheme began to operate.
December „Telegraph Wires (Unlawful possession) of 1950, Act was passed by
Parliament.
1950 March The First Asian Games held at Delhi was conveyed by a direct Radio
telephoto service between India and Japan.
1951 Innovation of Radio-Telephoto Service.
December Launching of S.S. Jalapushpa of Scindia Steam Navigation Company
1951 at Vizagapatam by Shri N.V. Gadgil from Bombay through telegraph
circuits. Wireless Telegraph link to Thailand.
June 1951 Wireless Telegraph link to Moscow.
July 1951 Wireless Telegraph and Telephone link to Egypt.
First Toll Cable: Delhi-Ghaziabad.
September Wireless Telegraph and Telephone link to Iceland.
1951
Mar/Aug 1952 Wireless Telephone link to Iran/Japan.
1953 12 channel carrier systems introduced.
1953 First Automatic Exchange in Calcutta. Telex Service in Bombay.
First 12-Channel Carrier Systems. Introduction of Frequency
Modulation. Mechanisation of Telephone Revenue Accounting.
July 1959 First Coaxial route between Delhi-Agra commissioned.
November First subscriber trunk dialing route commissioned between Kanpur
1960 and Lucknow.
December First microwave route between Calcutta-Asansol opened
1965
February 1967 First crossbar-local exchange commissioned at Mambalam – Madras.
December First crossbar trunk automatic exchange out into service at Madras
1967
March 1975 First PCM system between City and Andheri Telephone exchanges
commissioned in Mumbai.
„Advanced Level Telecom Training Centre‟ commenced training
activities from Delhi to be eventually shifted to its own campus in
Ghaziabad.
Contd…
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Table 3.1 Historical Events in the Evolution of Telecommunication Sector in

India (Contd…)

Year Events
1976 Installation of SPC gateway telex exchange and introduction
of International Subscriber dialed telex service.
First Digital Microwave System introduced in Calcutta Junction
network
1978 Introduction of Press Bulletin Service (PBS).
„Telecommunications Consultants India Limited‟ set up in the
public sector to provide consultancy services in telecommunication.
1979 First optic fibre system for local junction commissioned at Pune.
1980 First satellite earth station for domestic communications established
at Secunderabad (U.P.)
1981 Troposcatter system link between India and U.S.S.R. inaugurated.
1982 First SPC electronic digital telex exchange commissioned at
Bombay.
1983 First SPC analogue electronic trunk automatic
exchange commissioned at Bombay.
1984 „Centre for Development of Telematics (C-DOT) was established as
a society for development of digital switching system.
1985 First Mobile Telephone Service introduced at Delhi.
First Radio Paging introduced in Delhi.
1986 „Mahanagar Telephone Nigam Limited‟ and „Videsh Sanchar Nigam
Limited‟ were established.
1987 First digital coaxial 140 Mb/s between Ahmedabad and
Rajkot commissioned.
1988 International gateway packet switch system commissioned
at Bombay.
1991 I-Net exchange commissioned.
Inmarsat coastal earth station at ARVI to provide
maritime communication.
Voice Mail Service (VMS) introduced in Delhi.
1994 Announcement of National Telecom Policy.
Cellular telephone service started in Calcutta and Delhi.
Internet service provided by VSNL.
ISDN service started commercially.
1995 The “Telecom Regulatory Authority of India” was set up.
Wireless in Local Loop (WLL) telephone system introduced in
MTNL Delhi.
Indo – Nepal Optical Fiber link Commissioned.
Basic Telecom Services opened for private competition.
1998 New ISP Policy was announced.
1999 New Telecom Policy
DOT is separated into two organs-DTS and DTO
2000 Bharat Sanchar Nigam Limited (BSNL) is born
Source : www.bsnl.co.in
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3.2 Telecom Scenario in India

The Indian telecommunications industry is one of the fastest growing one in

the world. The industry has witnessed consistent growth during the last year on the

back of rollout of newer circles by operators, successful auction of third-generation

(3G) and Broadband Wireless Access (BWA) spectrum network rollout in semi-rural

areas and increased focus on the Value Added Services (VAS) market.

According to the Telecom Regulatory Authority of India (TRAI), the number

of telephone subscriber base in the country reached 742.12 million as on October 31,

2010, an increase of 2.61 per cent from 723.28 million in September 2010. With this

growth, the overall tele-density (telephones per 100 people) has touched 62.51 per

cent. The wireless subscriber base has increased to 706.69 million at the end of

October 2010 from 687.71 million in September 2010, registering a growth of 2.76

per cent.

Meanwhile, Indian Global System for Mobile Communication (GSM) telecom

operators added 17.45 million new subscribers in November 2010, taking the all-India

GSM cellular subscriber base to 526.18 million, according to the Cellular Operators

Association of India (COAI). The GSM subscriber base stood at 508.72 million at the

end of October 2010.

3.3 Value-Added Services (VAS) Market

Mobile VAS include text or Short Message Service (SMS), menu-based

services, downloading of music or ring tones, mobile TV, videos and sophisticated m-

commerce applications. As per a report, „India Telecom 2010‟ released by KPMG in

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December 2010, currently, the VAS market is worth US $2.45 billion to US $2.67

billion, which is around 10 per cent of the total revenue of the wireless industry. The

share of VAS in wireless revenue is likely to increase to 12-13 per cent by 2011, on

the back of increased operator focus on VAS due to continuous fall in voice tariffs,

increasing penetration of feature rich handsets, availability of vernacular content and

increased user adoption of VAS applications.

3.4 Major Investments in Telecom Industry in India

The booming domestic telecom market has been attracting huge amounts of

investment which is likely to accelerate with the entry of new players and launch of

new services. According to the Department of Industrial Policy and Promotion

(DIPP), the telecommunications sector which includes radio paging, mobile services

and basic telephone services attracted Foreign Direct Investment (FDI) worth US

$1,062 million during April-October 2010‟-2011. The cumulative flow of FDI in the

sector during April 2000 and October 2010 is US $9,993 million.

As per an industry report, the telecom industry witnessed Merger and

Acquisition (M&A) deals worth US $16.60 billion during April-December 2010,

which represented 28.26 per cent of the total valuation of the deals across all the

sectors during the period analysed. There were 10 inbound, outbound and domestic

M&A deals in the telecom sector during the first nine months of the current fiscal.

The biggest M&A deal in the sector was made by telecommunications service

provider Bharti Airtel through the acquisition of Zain‟s African mobile services

operations in 15 countries. The deal involved a transaction of US $10.7 billion. In

another deal, Bharti Airtel acquired 100 per cent stake of Telecom Seychelles Ltd for

US $62 million.
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Other major M&A deals included the acquisition of 95 per cent stake in

Infotel Broadband for US $1,032.26 million by Reliance Industries and 26 per cent

stake of US-based mobile chipmaker Qualcomm‟s Indian arm for US $57.72 million

by India's Tulip Telecom and Global Holding. Further, India-based GTL

Infrastructure Ltd. has bought 17,500 telecom towers of Aircel Ltd. for US $1,702.95

million.

3.5 Manufacturing Telecom Equipments in Telecom Industry

The Indian telecom industry manufactures a vast range of telecom equipment

using state-of-the-art technology. As per a press release by the Ministry of

Communications and Information Technology, the production of telecom equipments

in value terms is expected to increase from US $10.87 billion during 2008-09 to US

$11.87 billion in 2010-2011. Favourable factors such as policy moves taken by the

Government, incentives offered, large talent pool in Research and Development

(R&D) and low labour cost can provide an impetus to the industry. Exports increased

from US $89.24 million in 2002-2003 to US $3 billion in 2009-2010 accounting for

26 per cent of the total equipment produced in the country and it is expected to

increase to US $3.33 billion in 2010-2011.

Meanwhile, telecom regulator TRAI has released a consultation paper on

„Encouraging Telecom Equipment Manufacturing in India‟ seeking views of

stakeholders for promoting R&D and manufacturing of telecom equipment in the

country. The consultation paper issued on December 28, 2010 aims at discussing,

debating and finalising measures for promotion of R&D and creation of intellectual

property as well as manufacture of telecom equipment and electronic components in

India.
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Further, the Indian mobile handsets market continued to grow in the third

quarter 2010 as well to record a quarter-on-quarter growth of 3.6 per cent to touch

40.08 million units in the quarter, according to market intelligence firm International

Data Corporation‟s (IDC) India Quarterly Mobile Handsets Tracker. The year 2010 is

expected to end with total mobile handset sales of 155.9 million units.

"We expect India to move up to the third spot (after China and South Korea)

with a share of 8.5 per cent of the total (estimated) Asia Pacific (Apac) telecom

equipment production revenue of US $277 billion by 2014," Gartner said. The firm

estimates India's telecom equipment production revenue to grow at a Compound

Annual Growth Rate (CAGR) of 17.1 per cent to reach US $22.6 billion in fiscal

2014. India will be the fastest growing telecom equipment production market in the

Apac region over the next five years, it predicts.

3.6 Rural Telephony

The rural telephone connections have gone up from 3.6 million in 1999 to 12.3

million in March 2004 and further adding to 200.77 million in March 2010. Their

share in the total telephones has constantly increased from around 14 per cent in 2005

to 32.75 per cent at the end of October 2010. The rural subscribers have grown to

243.04 million at the end of October 2010. The wireless connections have

contributed substantially to total rural telephone connections; it stands at 233.95

million in October 2010. During 2010-2011, the growth rate of rural telephones was

21.05 per cent as against 18.69 per cent of urban telephones.

The private sector has contributed to the growth of rural telephones as it

provided about 84.27 per cent of rural telephones during October 2010.
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The government plans to connect all revenue villages in India either through

landline, mobile or Wireless Local Loop (WLL) by February 2011. “We have already

connected about 96 per cent of the revenue villages. The remaining 25,000 villages

will have connectivity by February 2011,” stated Mr. Sachin Pilot, Minister of State

for Communications and Information Technology.

Further, the Government, under Bharat Nirman II Programme, has envisaged

providing broadband coverage to all 250,000 Gram Panchayats by 2012.

3.7 Policy Initiatives by Government

The government plans to formulate a comprehensive „National Telecom

Policy 2011‟ including the recognition of Telecom as infrastructure and as an

essential service, encouraging Green Telecom, steps to accelerate migration from

Internet Protocol Version (IPv) 4 to IPv6 at the earliest, release of IPv6 standards by

Telecom Engineering Centre for implementation in the country, etc., as per a press

release by the Ministry of Communications and Information Technology.

Further, the government plans to take concrete steps towards finalisation of

„National Broadband Plan‟ including strategy for implementation and initiation of

steps for roll out of optical fibre.

The government has taken many proactive initiatives to facilitate the rapid

growth of the Indian telecom industry which include,

1) In the area of telecom equipment manufacturing and provision of IT-

enabled services, 100 per cent FDI is permitted,

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2) No cap on the number of access providers in any service area. In 2008, 122

new Unified Access Service (UAS) licenses were granted to 17 companies

in 22 services areas of the country,

3) Revised subscriber based criteria for allocation of GSM and Code Division

Multiple Access (CDMA) spectra were issued in January 2008 and

4) To provide infrastructure support for mobile services a scheme has been

launched to provide support for setting up and managing 7,436

infrastructure sites spread over 500 districts in 27 states. As on December

31, 2009, about 6,956 towers have been set up under the scheme.

According to the Consolidated Foreign Direct Investment (FDI) Policy

Document, the FDI limit in telecom services is 74 per cent subject to the following

conditions:

1) This is applicable in case of Basic, Cellular, Unified Access Services,

National/ International Long Distance, V-Sat, Public Mobile Radio

Trunked Services (PMRTS), Global Mobile Personal Communications

Services (GMPCS) and other value added Services,

2) Both direct and indirect foreign investment in the licensee company shall

be counted for the purpose of FDI ceiling. Foreign Investment shall

include investment by Foreign Institutional Investors (FIIs), Non-resident

Indians (NRIs), Foreign Currency Convertible Bonds (FCCBs), American

Depository Receipts (ADRs), Global Depository Receipts (GDRs) and

convertible preference shares held by foreign entity. In any case, the

'Indian' shareholding will not be less than 26 per cent,

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3) FDI up to 49 per cent is on the automatic route and beyond that on the

government route. FDI in the licensee company/Indian

promoters/investment companies including their holding companies shall

require approval of the Foreign Investment Promotion Board (FIPB) if it

has a bearing on the overall ceiling of 74 per cent. While approving the

investment proposals, FIPB shall take note that investment is not coming

from countries of concern and / or unfriendly entities,

4) The investment approval by FIPB shall envisage the conditionality that the

Company would adhere to license Agreement and

5) FDI shall be subject to laws of India and not the laws of the foreign

country / countries.

3.8 The Road Ahead

According to a report published by Gartner Inc in June 2009, the total mobile

services revenue in India is projected to grow at a compound annual growth rate

(CAGR) of 12.5 per cent from 2009-2013 to exceed US $30 billion. The India mobile

subscriber base is set to exceed 771 million connections by 2013, growing at a CAGR

of 14.3 per cent in the same period from 452 million in 2009. This growth is poised

to continue through the forecast period, and India is expected to remain the world's

second largest wireless market after China in terms of mobile connections.

"The Indian mobile industry has now moved out of its hyper growth mode, but

it will continue to grow at double-digit rates for next three years as operators focus on

rural parts of the country", said Mr. Madhusudan Gupta, senior research analyst at
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Gartner. "Growth will also be triggered by increased adoption of value-added

services, which are relevant to both rural and urban markets".

Mobile market penetration is projected to increase from 38.7 per cent in 2009

to 63.5 per cent in 2013, according to Gartner.

The much-awaited mobile number portability was launched on November 25,

2010 in Haryana and will be available to more than 700 million subscribers from

January 20, 2011 across the country. As continued efforts of the Government to

increase competition in the market and to provide wider choice to customer, Mobile

Number Portability will be an important step.

3.9 Profile of BSNL

The BSNL, New Delhi has the following organization structure (Figure 3.1) in

India with a total employment compliment of 2,85,749 (all India).

The vision, mission, objectives and organizational hierarchy of BSNL are as follows

Vision

To become the largest telecom Service Provider in Asia.

Mission

To provide world class telecom infrastructure in its area of operation and to

contribute to the growth of the country's economy.

Objectives

a. to be the Lead Telecom Services Provider,

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b. to provide quality and reliable fixed telecom service to our customer

and thereby increase customer's confidence,

c. To provide mobile telephone service of high quality and become no. 1

GSM operator in its area of operation,

d. To provide point of interconnection to other service provider as per

their requirement promptly,

e. Implementation of Triple play as a regular commercial proposition and

f. To facilitate R & D activity in the country.

b) Figure 3.1 Organisational Structure of BSNL in India

Source: BSNL Reports

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3.10 Present Status of BSNL in Indian Telecom Market

BSNL is an integrated Telecom Service Provider which provides services in

the areas of Landline, Broadband, Mobility, Data Circuits and Managed services in

the form of VOICE, DATA and VIDEO.

As on 31.10.2010, BSNL has a customer base of 106.78 million. Out of this,

26.04 million are Landline connections, 75.02 million are GSM connections, 5.72

million are WLL connections and 8.53 million are Broadband connections.

BSNL has 38,330 Digital Telephone Exchanges, 6.55 lakh route kilometre of

Optical Fibre Cable across the country. BSNL has significant presence in rural areas

with 13.7 million rural landline & WLL customers. Villages to the extent of 96 per

cent are covered with Village Panchayat Telephones (VPT) and 65 per cent villages

are covered with Mobility services.

As far as market share is concerned, BSNL stood 2nd, on the basis of gross

revenue and has a market share of 73.51 per cent in wire line segment - (1st Position),

11.42 per cent in Wireless segment - (5th Position) as on 30.09.2010. With regard to

Tamilnadu Telecom Circle is concerned, the number of wireline connections are

34,81,360 and number of wireless connections are 62,79,283. The various

developments taken place in BSNL since its inception 2000 -2011 are presented in

Table 3.2.
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Table 3.2 Developments in BSNL from its Inception

Year Developments
2000 Bharat Sanchar Nigam Limited (BSNL) is born.
Telecom disputes, settlement and Appellate Tribunal were established.
National Long Distance Service opened for private competition.
2001 Convergence Bill to promote, facilitate and develop the carriage and
content of communications tabled in the Parliament.
Policy for GMPCS service has been announced.
Policy for PMRTS has been announced.
Policy for UMS was announced.
2002 International Long Distance Service opened for private competition. Internet
telephony was started.
Country wide Cellone Mobile service launched.
2003 First MPLS-VPN technology goes commercial
2004 International Roaming facility of Cell One service launched.
2005 Broad band facility (with 256 Kbps speed) launched
2006 Broad band facility (up to 2 Mbps speed) launched
2007 Broadband multiplay service launched
2008 IP TV launched commercially
2009 Wi-MAX service launched in select cities across the country

2010 3 G –Third Generation Mobile Services launched.

2011 Nationwide Mobile Number Portability (MNP) service started
Planning to launch country wide BWA technology access.
Source : BSNL Report

3.11 Role of BSNL in Future Indian Telecom Scenario

The present Indian Telecom Market scenario is characterized by,

a) Shift from Fixed to Mobile services,

b) Voice becoming a commodity with massive price erosion,

c) Severe competition from around dozen Telecom Operators in each circle

d) Entry of foreign players

e) Severe price competition leading to falling of tariffs and

f) Transition from Technology led business to consumer business

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Hence, future growth of Indian Telecom industry lies in DATA SERVICES.

In such circumstances, BSNL is transforming its organization setup to cater to the

needs of emerging technologies as well as consumer business requirements.

Also, BSNL, being a Government Organisation , has many social obligations

viz., to fulfill Service in rural areas, service during natural calamities/disasters,

emergency situations, elections, etc., The above services have to be maintained, even

though it is economically unviable. For example, when cloud burst occurred in Leh

area, all the communication facilities were destroyed by flash floods. Only BSNL

deputed extra staff to the area and restored the communication link to defence and

public operations in a record time. This was widely appreciated and acknowledged by

Honorable Ministers also. Also, the maintenance of the Telegraph System is

adversely affecting the performance of BSNL. Due to no growth rate of fixed lines,

stiff competition in Mobile segment, removal of Government subsidies and

Government compensation, USO fund obligations, License fee reimbursements, 3G /

BWA spectrum charges, BSNL is incurring losses on these score.

Telecom is a strategic sector and a strong PSU in this sector is a must. Also,

BSNL is fulfilling the country‟s strategic needs to provide a reliable network and

telecommunication services to remote and other sensitive areas. BSNL is also

fulfilling the social obligations of the Government in the Telecom field. Hence, the

Government of India is planning to bear the cost of providing these strategic telecom

needs in sensitive and strategic areas and to bring BSNL in the fore front of Telecom

field by focusing.
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3.12 The Organisational Structure and Hierarchy of BSNL,

Salem SSA

This hierarchy is a well defined and established one in BSNL and is

depicted in figure 3.1 and 3.2. The operation is carried out by the lower most

executives viz. Junior Telecom Officers (JTO) at field level. They will be

reporting to the immediate higher level in the hierarchy called Sub Divisional

Engineers (SDEs) located at the head quarters as well as at the field levels.

These SDEs will be reporting to Divisional Engineers (DEs) who will be mostly

at Head Quarters / Administration (HR) Levels/Field levels. The next level of

reporting goes like Deputy General Manager (DGMs) / General Managers

(GMs).

The Present study is conducted in Salem SSA. This Salem SSA

comprises of two revenue districts namely Salem and Namakkal of Tamilnadu.

This Salem SSA is headed by one General Manager for Administration and

Development of Salem SSA. The General Manager is assisted by three Deputy

General Managers (DGMs for Administration / Planning at Salem and the other

at the district headquarters like Namakkal .

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Figure 3.2 Organisational Structure of Executives/NonExecutives of BSNL

1 Salem Manager
General SSA (SSA)

2
Deputy General Manager Deputy General Manager Deputy General Manager
(Administration) (Planning) (Urban / Rural)

3
Divisional Engineer Divisional Engineer Divisional Engineer
(Administration) (Planning) (Internal / External)

4
Sub Divisional Engineer Sub Divisional Engineer Sub Divisional Engineer
(HRD) (Eqpt./Operns/Planning) (Internal/Extnl/Commerci
al)
5
Jr. Telecom Officer Jr. Telecom Officer Jr. Telecom Officer
(Eqpt./Operns/Planning) (Internal/External) (Commercial)

6
Telecom Technical Telecom Technical Telecom Technical
Assistant Assistant Assistant
Source : BSNL, Salem SSA; Note : 1 & 2 are top management deputation cadre from Department of
Telecommunications, 3, 4 & 5 are Executive cadres and 6 is Non-Executive

Executives : The following are included in executive cadre in BSNL,

Salem

Divisional Engineer (DE) will be the overall in charge of that particular

division which he is heading and Sub Divisional Engineers (SDE) and Junior Telecom

Officers (JTO) will be working under him. In all the above cases executive job

profile, and JTO / SDE job profile will be more or less same in most of the sections or

departments depending on staff availability, working hours etc. As DE will be the

overall in charge of that section, monitoring of SDE / JTO work will be the major

profile of DE cadre.
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Non-Executive : The non executive cadre include all telecom technical

assistants (TTAs) who are the base level employees working in BSNL, Salem. They

will be reporting to their immediate supervisors JTOs and SDEs (Figure 3.2).

3.13 Job Roles of Respondent Employees (Executives and Non

Executives)

Job Profile of Executives

Job roles of executives in various departments and sections are as under :

a) HR / Staff Department

The job profile of the executive in HR/Staff Wing includes HR related staff

matters, staff grievances, issuing of transfer orders/posting orders/promotion orders,

attending to the personal claims , personal advances and all other miscellaneous staff

related activities.

b) Commercial Department

The job profile of the executive in Commercial Section includes commercial

related activities, new telephone connection advice note issuing, telephone related

commercial duties, disconnection/reconnection job and all other miscellaneous

commercial related activities.

c) General Section

The job profile of the executive in General Section includes stationery

procuring related activities, printer papers / floppy / CD / DVD purchases

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management, furniture and other contingency expenses and all other miscellaneous

general section related activities

d) Computer Department

The job profile of the executive in Computer Section includes computer

system maintenance, computer purchase, computer networking, software developing

and other related computer peripheral management and all other miscellaneous

computer section related activities

e) Planning Department

The job profile of the executive in Planning Section includes complete

planning activities pertaining to SSA, telephone exchange, outdoor plant and

transmission network planning work, Coordination for installation and commissioning

of new exchanges and transmission equipments, complete planning activity pertaining

to SSA and all other miscellaneous planning related activities

f) Transmission Section

The job profile of the executive in Transmission Section includes

installation/maintenance/testing and trouble shooting of transmission equipments,

attending to faults in transmission equipments and all other miscellaneous

transmission unit related activities

g) Indoor Section

The job profile of the executive in Indoor Section includes installation,

maintenance, routine testing, trouble shooting of indoor telecom equipments viz.,

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battery, power plant, engine and switch equipments and all other miscellaneous

indoor section related activities

h) Outdoor Section

The job profile of the executive in Outdoor Section includes laying of

underground cables, testing and maintenance of the same, maintenance of telephone

post, pillar, distribution box, outdoor line/ attending cable fault and all other

miscellaneous outdoor section related activities.

i) Rural Section

The job profile of the executive in Rural Section includes maintenance of

indoor and outdoor of a group of small and medium exchanges spread over a few

small towns/villages and all the indoor/outdoor/transmission activities for these

exchanges and all other miscellaneous rural section related activities.

j) Civil Section

The job profile of the executives in Civil Section includes new telephone

exchange building construction, existing telephone exchange building maintenance

and all other miscellaneous civil section related activities.

i) Electrical Section

The job profile of executives in Electrical Section includes installation, testing

and commissioning engine alternator, maintenance of A/C plant and maintenance of

all other electrical related works and other miscellaneous electrical section related

activities
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Job profile of Non-Executive (TTA) : The job includes Customer Care

Manning, Out Door fault attending and Assisting JTO / SDE / DE in their job

3.14 Profile of HRD Functions Leading to Organisational Climate

in BSNL, Salem SSA

The Researcher searched the records, circulars and interacted with executives

and other staff of HR Department in BSNL and profiled the prevailing HRM

functions so as to relate the employees perceptions leading to organizational climate.

Bharat Sanchar Nigam Limited has a vast reservoir of highly skilled and

experienced work force of about 2, 85,749 personnel in India and 449 employees in

Salem SSA and the HR functions of BSNL, Salem SSA include.

a) Leadership Facilitation and Support

Leadership facilitation and support does exist in BSNL, Salem. In most of the

cases, the supervisor is friendly and can be approached easily and they provide new

ideas and new methods to overcome the problems and all this rely directly on the

individual capacity / calibre of the supervisor. However, the success and the ability of

a True Leader (Supervisor) lies entirely on his/her individual characteristics and

charisma. The researcher interacted with top executives of BSNL and got confirmed

that the executives undergo many management training, counseling, negotiating skill

development programmes so as to enable them to lead their workforce under them.

We observe the following to become true in the organization.

“Leadership is influence, the ability of one person to influence others”

(Sanders, 1980)
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The primary goal of a leader is to produce more leaders. “The substance of

the leader‟s job is to produce more leaders, not more followers”. The ultimate

measure of leadership success is whether “the organization and the followers grow”

(Fairholm, 1997).

George Litwin and Robert Stringer first wrote up their ground-breaking

research on organizational climate in 1968. They demonstrated that certain leadership

styles produce a positive and stable organizational climate that makes an impact on

motivation and performance.

b) Management Effectiveness

An Organisation should be run effectively by the management in order to deal

with any eventualities during the process of its operation. Management tries to be

more effective by defining the job role, goals of the executives in an exhaustive way.

Every task is planned only to succeed and the management expects a greater role of

the executives in doing so. However, meticulous implementation and follow-up lead

to the stage where the task becomes a successful project. Hence, the effectiveness of

the management depends entirely on the proper functioning of the equipments and on

the sincerity of the executives, which is an open secret. The company had issued

periodical guidelines, work rules, circulars on business and staff role related matters

and conduct periodical revision, review and follow up measures.

c) Organisational Support and Work Environment

The work environment in BSNL is very safe as it reduces job pressure in most

of the cases. As being a PSU, establishment of job environment as available in other

MNC / Corporate sector is highly impossible and hence a balance in job nature is
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maintained to offload the unnecessary work load. Many plans are formulated for

executives (self & family) in detail and it gets diluted in the implementation stage,

leading to loss of good will among the executives and non executives. Also, this may

lead to create a bad image for the organization/superiors and BSNL as a whole.

Hence, it is found that a damage control exercise is initiated to rectify the mistake

committed and to regain the lost glory.

d) Power Conflict and Ambiguity

Power politics does exist in BSNL and is in a controlled stage .The

manipulation of the situation by the executives for their personal advantages are

tackled effectively. Ambiguity of job role does not exist in BSNL as the job

responsibilities and job roles of the executives are clearly defined. However,

variation in the job role and work nature changes dynamically for certain executives

working in particular sections due to the field requirements. The normal job activities

are sometimes hampered by adherence to excessive rules and regulations, which has

to be avoided to make the organization an effective one.

e) Job variety, Challenge and Autonomy

The job role of the executives is clearly defined to each individual and they are

encouraged to try different things in their respective sections. This leads to

development of skills / competence/knowledge by executives in their respective fields

of proficiency and can be termed as job variety. However, this situation is not

applicable to all the sections of BSNL as most of the sections are having fixed or

routine job schedule.

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f) Workgroup Cooperation, Friendliness and Warmth

The atmosphere prevailing in many work groups/sections depends purely on

the individual character/charisma of the superior and his / her rapport with the

subordinates in that particular section. An able and good supervisor sets an example

by creating warmth and friendliness in organization, which leads to better work group

cooperation and a winning formula for their sections. However, the effectiveness of

cooperation, friendliness and warmth in a workgroup depends entirely on the

individuals and collectively on the section.

g) Creativity and Innovation

Creativity and Innovation help an organization to withstand competition and to

maintain a sustainable growth. The platform for exhibiting one‟s own creativity

exists only in certain sections, where it is required to do so. Executives working in

such special/elite sections have the advantage over other executives in implementing

the new ideas and innovative thoughts. Hence, it can be concluded that executives in

normal routine work sections can also be migrated at regular intervals to innovative

elite sections to have a taste of creativity and innovation in their job role.

h) Communication

Communication is the method of conveying information from one place to

another place (or) from one person to another person in BSNL. It is a widely agreed

fact that communication barrier exists in the organization. Normally, the message

related to the personal benefits / promotions / transfers / trainings / miscellaneous

matters of the concerned executive section or department is received in advance

through SMS / Phone and the proper communication will be received in due course.
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Another method of proper communication practice in BSNL will be sending of letters

through departmental proper channels and receiving in the same way. Moreover,

executives are free to express their suggestions/responses to the superiors through the

available modes of communication viz. E-mail / SMS / Letter or Circulars. Regular

business purpose meetings are also held as and when required to communicate with

employees.

i) Training

To meet the technological challenges, employees are trained for technology

up-gradation, modernization, computerization etc., in BSNL's training centers spread

over across country. These centers are properly equipped with the requisite

infrastructure facilities such as lecture rooms, modern audio-visual aids, libraries,

hostels etc.

The two apex training centers of BSNL i.e., Advance Level Telecom Training

Center (ALTTC) at Ghaziabad and Bharat Ratna Bhimrao Telecom Training Center at

Jabalpur are comparable to any world class Telecom Training Center. Moreover; 43

zonal training centers and a National Academy of Telecom Finance and Management

at Hyderabad have been running for several years from now.

Different curriculum of these centers imparts technology based training,

training for attitudinal change, basic educational and skill development programs etc.

The training needs of entire executives of BSNL (all over India) is managed by the

Training centre having the central headquarters at Jabalpur (MP). This institute

designs and schedules the courses for imparting training to both new recruits as well

as existing executives. For the sake of convenience of the executives, one Regional

Training Centre each at Circle (state) headquarters is established and training is

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imparted accordingly to the executives from that circle. In addition, one advanced

level training centre is established at Ghaziabad (UP) to impart training in

latest/emerging technologies to all the executives.

j) Recruitment

Recruitment in BSNL is done in the following methods

Direct recruitment of JTOs and Promotion of JTOs to higher cadres.

Direct recruitment for the post of JTOs (Junior Telecom Officer to Executive

cadre) is through competitive written examination conducted by BSNL New Delhi on

all India basis on a single day. The higher cadres viz., SDE, DE, DGM cadres are the

promotion cadres from JTO and no other cadre is directly recruited other than JTOs.

Direct recruitment for the post of TTAs (Telecom Technical Assistant-Non

Executive cadre) is through competitive written exam conducted by BSNL at Circle /

SSA basis on a single day.

The further cadres viz. SDE, DE, DGM cadres are promotion cadres from

TTA / JTO, no other cadre is directly recruited other than TTAs / JTOs.

The above said examinations are conducted as and when any vacancy /

requirement arises and not conducted periodically.

k) Career Opportunity

Plenty of growth is available for the executives in BSNL leading to a bright

future. BSNL conducts departmental competitive examinations (whenever vacancy

arises) and wide publicity is given to the executives to take up the said examination.

Also, superiors encourage their subordinates to attempt the departmental competitive

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examinations to achieve higher goals of the individuals. Regular coaching classes are

conducted by the experienced / talented executives in the office during weekends /

evening hours for the benefit of the probable candidates, who are writing the

examination. Competitive examination guide / technical manuals are prepared by the

experts in the department / executive trade unions and circulated to the candidates.

Also, executives are encouraged to take up higher studies in their respective field of

proficiency. The executives are provided with cash assistance for the academic

course being studied by them. Hence, a lot of opportunity for growth in career exists

in BSNL and it is left with the individual executive to utilize the same effectively.

l) Promotion

Promotion in BSNL is broadly divided into two categories:

1) Post based Promotion

2) Time bound Promotion

1) Post based Promotion

This is implemented whenever vacancies arise in SDE/DE cadres due to

retirements/promotions from previous cadres on all India basis. The corporate office

at New Delhi decides on the number of posts (based on the report from circles) for

promotion. The process involves short listing of probable candidates among the

executives based on seniority, fitness, attendance conditions and performance, by

scrutinizing the candidates‟ details and issuing of promotion orders. In addition 25 per

cent of the above said promotions are filled up through limited departmental

competitive examination among eligible candidates.

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2) Time bound Promotion

This is implemented once in 5 years irrespective of the availability of

vacancies. Promotion committee is formed every year and eligible executives are

placed in next immediate higher pay scale (without change of designation/job profile).

The process involves short listing of probable candidates among the executives based

on attendance conditions, performance and scrutinizing the candidates‟ details and

issuing of time bound promotion orders.

m) Rewards and Recognitions

Awards are presented to executives on SSA / Circle / All India basis based on

their performance. An award committee is formed every year at each level (SSA /

Circle / all India) and probable candidates are shortlisted for the award. The selection

of the executives for the award is based on performance, any additional (or) special

task accomplished and other related factors as applicable for the corresponding year.

The executives selected for the all India award are presented with the award on 17th

May, every year at New Delhi (17th may is International Telecommunication Day) by

Honorable Minister. The SSA and Circle award winners are presented with the award

at District and State Head quarters respectively at the same time. Each award carries a

citation and a cash award.

n) Motivation

The job of a manager in the workplace is to get things done through

employees. To do this the manager should be able to motivate employees. Motivation

practice and theory are difficult subjects, touching on several disciplines.

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In spite of enormous research, basic as well as applied, the subject of

motivation is not clearly understood and more often than not poorly practiced. To

understand motivation one must understand human nature itself. And there lies the

problem! BSNL Provides following motivational packages to its employees; they

have free telephone facility, Promotion, Transfer, Time to time revision of pay scale,

Central government par facility, Quarters and Good working environment. There is

award / reward system and letter of appreciation for good work done by employees.

o) Grievance Redressal and Staff Suggestion Scheme

Grievance redressal mechanism is implemented as available in all other

Government PSUs. The executives have before them a clearly formulated method of

reporting their grievances to the next higher level authorities through proper channel.

The staff grievance redressal committee analyses grievance report received and

accordingly a genuine solution is arrived. In this way the employee grievances are

addressed amicably. Moreover, a separate Women‟s wing is established in each SSA

for addressing exclusively the grievances of female executives .There is a system to

offer staff suggestion scheme.

p) Trade Unionism and Participative Management System in BSNL

The Trade Union practice in BSNL is followed as available in all other

Government run PSUs. The Trade Unions are broadly classified as follows:-

1) Non-Executive Trade Unions

2) Executive Trade Unions

As per labour and industrial law regulations, membership verification election

has to be held once in two years to elect the majority represented trade union. The
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elections are held at SSA/Circle/all India basis on a single day and the polled votes

are counted as per prevailing rules. The representatives of the victorious Trade Union

are allowed all the permissible benefits, affiliations and permitted to represent the

grievances of the non-executive/executive employees to the Top Management. As the

absorption process of non-executives is already completed, the election for the non-

executive trade unions are being held regularly (once in TWO years) and the union

viz., BSNLEU (BSNL Employees Union) emerged victorious in the last elections

held in February 2011.

As the absorption process of the executives is not yet completed, the elections

for the same could not be held. As of now, the four major executive trade unions viz.,

SNEA, AIBSNLOA, AIBSNLEA, and AIGETOA are representing the grievances of

their respective executive employees of BSNL to the top management.

Representatives of majority trade unions (executive and Nonexecutive cadre) and all

recognized trade unions are members of Joint Coordination Meeting (JCM). This

JCM will have frequent interactions with BSNL top management on important of

matters and day today affairs of BSNL.

q) Perks, Loans and Advances to Staff

Perks are being paid to the executives apart from their regular pay and

allowances for specific recreation / enhancement purpose and also to boost the

employee morale. The type of various perks being paid to the executives include,

1) Professional upgradation allowance to upgrade their professional skills,

2) Food allowance to meet out their food requirements while in office,

3) Transport allowance for commuting from home to office and back,

4) Medical allowance to foot the bill of out-patient hospital treatments,

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5) Complete Hospital bill payment for undergoing surgery / check-ups, etc.,

and also for undergoing in-patient treatment in select hospitals,

6) Reimbursement of newspaper bill purchased in the residence,

7) Festival allowance,

8) House building advance,

9) Motor car advance,

10) Personal computer advance and

11) Leave travel concession

Apart from the above said allowances there are some special allowances like

Special compensatory remote locality allowance, Special compensatory bad climate

allowance, scheduled / tribal area allowance, Island special duty allowance, hard area

allowance and Rural duty allowance.

r) Pension and Retirement Benefits and Gratuity in BSNL

The following are the different kinds of Pension that are in vogue in BSNL

1) Superannuation pension

2) Retiring Pension

3) Invalid Pension

4) Compensation Pension

5) Compulsory Retirement Pension

6) Compassionate allowance

7) Voluntary retirement Pension

Commutation of pension can be done to the maximum of 40 per cent of

pension that can be commuted with or without medical certificate and a lump sum in

lieu then of can be obtained. Apart from this family pension, enhanced family pension

and family pension to family of missing employees are also provided.

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Service gratuity, retirement gratuity and death gratuity is granted to

employees.

s) Miscellaneous Facilities in BSNL

Staff cooperative society is functioning since its inception in 2000 with head

quarters at Chennai. Once the employee gets enrolled ,subscription fee has to be paid

by employees towards the society membership and all facilities like loans, advances

and exgratia are extended to members. The society is functioning well and employees

are happy about its performance.

Staff clubs and canteen are established at each and every telephone exchanges

for the benefits of the employees. Thus by profiling the existing organizational

climate dimensions, the researcher achieves the realization of the first research

objective namely, To Study the existing Organisational climate and dimensions led

by present HRM practices.This Objective achievement also paved way for

standardizing the questionnaire used in the study.