Address the root of problem

For almost a decade now, it has been observed that whoever takes on the role of Minister or State Minister of Posts and Telecommunications, their initial pledge is to make the state-owned telecom companies profitable. Once again, Zunaid Ahmed Palak, assuming the position of state minister, has reiterated the same promise. Particularly, there has been a surge in focus on the three companies: BTCL, Teletalk, and TSS¬–indicating significant reforms in their management if they fail to become profitable. Simultaneously, there's a clear indication of welcoming private investment in these state-owned companies.

Previous several ministers and state ministers at the department of Posts and Telecommunications have similarly sought private investment for these state-owned companies. However, none of them have been able to bring about significant transformative changes in the operations of these companies because they have either not addressed the root cause of the problem or lacked the capability to make substantial changes. Despite the current State Minister's stern statements, the deteriorating condition of the state-owned companies cannot solely be attributed to mismanagement or public apathy.

The state minister seems particularly concerned about three companies, but there are three more companies: Bangladesh Submarine Cable Company Limited (BSCCL), Bangladesh Cable Industries Limited, and Bangladesh Satellite Company. Among these three companies, it is said that Bangladesh Submarine Cable Company Limited (BSCCL) is profitable; however, it should be remembered that this is not the result of any special expertise of the company's employees because in the country's wholesale bandwidth market, BSCCL had a monopoly for a long time. Therefore, there was no reason not to make a profit; however, due to the incompetent management of the company, it lost the market to ITSCs (International Terrestrial Cable Companies) using terrestrial pathways to supply wholesale bandwidth.

Now submarine cable companies have come into the private sector. As a result, there may be a big impact on the accounts of BSCCL in the coming days. On the other hand, Bangladesh Cable Industry Limited has been kept alive with various government facilities. If these advantages are removed and the competition is equal in the market, the profit will be away, the existence of this company may be really in crisis. The character of Bangladesh Satellite Company is different. As a result, the income and expenses of this company cannot be compared with other five companies.

Now, the three companies that the Minister was concerned about are relevant. Bangladesh Telecommunications Company Limited (BTCL) is the largest telecommunications company in the country. This company has an extensive transmission network nationwide. It can be said that BTCL sets the benchmark for telecommunications transmission infrastructure in the country. Moreover, BTCL sells the most internet bandwidth in both wholesale and retail markets within the country. Beyond that, the company holds licenses for services such as international gateway, interconnection exchange, domain hosting, international private leased circuits, or IPLCs. This company also successfully launched the OTT calling app 'Alap' in the country. Despite having so many business opportunities, this company is not profitable. But why?

The root cause of crises like that of BTCL lies in its Article of Association (AOA). This 'AOA' is the fundamental basis of governance for state-owned companies. All state-owned companies in the telecommunications sector are operated with the same type of 'AOA', and the most crucial responsibility in management lies with the Secretary of the Department of Posts and Telecommunications. There are also additional secretaries, joint secretaries, or deputy secretaries from multiple ministries on the boards of these companies. Representatives from two chambers are also present. One representative is from Bangladesh University of Engineering and Technology (BUET). Currently, the Vice-Chancellor of the university is a member of the board of BTCL.

On the other hand, turn your gaze towards the Indian national telecommunications company, Bharat Sanchar Nigam Limited (BSNL). There, the Chairman and Managing Director (CMD) are the same individual. Currently, the person holding this position is Pravin Kumar Purwar. With nearly 30 years of experience in various fields of finance and marketing in the telecommunications sector, he has taken on the responsibility of top management at BSNL. He came to this position with a sufficient professional identity as a postal and telegraph cadre officer of the Indian government, evident from his personal profile. Furthermore, other members of the BSNL board also have rich experience in telecommunications, economics, market management, policy research, etc. In Bangladesh, BTCL is somewhat similar to BSNL as a company; however, there is a vast difference in the structure and management of the boards of the two companies.

However, some may be quick to say that in the last quarter of the last financial year, BSNL has accounted for a loss of around one and a half thousand crore rupees. However, before citing this example, it should be noted that BSNL generated approximately 20,699 crore rupees in revenue in the last fiscal year. Essentially, the apparent losses shown by the company are due to the expenditure incurred in expanding its services. While it's true that even though being a state-owned company, BSNL discloses its income and expenditure for each region. Whereas, previously, in Bangladesh, such detailed financial reports of BTCL could generally be found in economic reviews. Now, they are not available. The question of publishing financial reports for each region doesn't even arise now.

In contrast, India's BSNL hasn't fragmented its operations. This company provides a range of telecommunications services, including transmission services, internet bandwidth sales, mobile telecommunication services, and data center and cloud services. Moreover, the company itself owns submarine cables and cable manufacturing facilities. Consequently, this state-owned company stands firmly as a comprehensive digital service provider.

However, in our country, submarine cable connectivity has been considered a project of BTCL, a subsidiary of BTCL. Later, it was spun off into a separate company. Similarly, TeleTalk also began as a project of BTCL under BTCL's initiative but eventually became a separate entity. The need to manufacture landline handsets for BSNL customers led to the establishment of the telephone manufacturing company, Teletalk. BTCL is the largest customer of Bangladesh Cable Industries among all cable manufacturing companies. Upon careful consideration, it becomes quite clear that BTCL has lost its foothold in the telecommunication sector due to the unnecessary creation of five separate companies.

Imagine, five companies mean five bureaucratic boards. The regular operation of these boards incurs costs five times more. On the other hand, due to the fragmentation into five parts, the parent company undergoes gradual deterioration. As mentioned earlier, the current Article of Association has encouraged incompetence and nepotism in these companies. Such a system where one after another individuals with little understanding of the telecommunications sector become the child board chairpersons in state-owned telecommunications companies. Their initial statement upon assuming the responsibilities of the board is, "I don't understand this sector yet." The board chairman then starts attending various telecommunications conferences abroad to grasp the sector's understanding. Then, suddenly, they become senior specialists in telecommunications overnight. Some individuals' capabilities become so evident that they convene a board meeting, evaluate technical and financial aspects of tenders, and surprise everyone by awarding a work order to the preferred company, all on the same day! Afterwards, they swiftly change roles, becoming secretaries of other ministries. A new and another child board chairman joins in.

I urge the state minister to take measures to address the weakness in the Article of Association and initiate efforts to establish professional management. Firstly, recruit individuals with at least 15-20 years of experience in the sector as chairpersons of the boards. Consolidating the five companies would be ideal, although it may be somewhat challenging at the moment. However, bringing the five companies under the same board can be easily accomplished, paving the way for consolidation efforts to begin. As a result, the operational expenses of the five companies would decrease, while their service delivery capabilities and coverage would increase.

Secondly, over the past few years, allegations of irregularities in project procurement and implementation have repeatedly surfaced in these companies. Despite returning funds from projects, such as in the case of BTCL borrowing funds from Japan, allegations of irregularities have persisted. Even TeleTalk has struggled to stand on its own feet after all these years. BSCCL, submarine cable, and TESS have been surrounded by serious allegations of irregularities. Even government investigation reports have highlighted allegations of irregularities. To properly investigate why these allegations keep arising, establish a national investigation commission composed of telecommunications experts, economists, policy researchers, and legal experts. Based on the commission's recommendations, take measures to prevent irregularities, ensure that unnecessary projects are not undertaken in the future, prevent projects from being implemented under different names to avoid scrutiny, ensure fiscal responsibility in project expenditures, and prevent the company from becoming accountable to any particular contractor.

Thirdly, streamline the company's workforce structure. Eliminate positions that have become unnecessary in the course of time and create positions that are needed according to the demands of the time. Implement measures to phase out employees whose roles are no longer aligned with smart management practices.

Fourthly, ensure the implementation of smart customer service management across the companies. Since 2018, there has been an effort to enhance smart service management in BTCL.  Apps have been launched to facilitate complaint registration and resolution. However, in the past year, there has been a decline in this smart service management. It is imperative to swiftly address customer complaints and ensure a seamless service experience.

State Minister Zunaid Ahmed Palak is an enterprising and intelligent individual who works tirelessly day and night. Hopefully, he will take appropriate and timely initiatives to ensure professionalism and smart management in the state-owned telecommunication companies.
Author: Journalist and IT analyst