(By Nikhil Pahwa & Nasreen Ghani)

Even as India’s government owned telecom operator BSNL announced that it’s geared up for a strike called by its employees, reports are coming in of services being paralysed and even customers not being able to pay bills. The 48 hour strike appears as if it’s gathering momentum, and will grow stronger.

The telco had announced that it has set up control rooms at the BSNL Corporate Office in New Delhi, and at state and district levels to monitor the strike. A section of executives of BSNL belonging to the cadres of Junior Telecom Officer and Junior Accounts Officers, recruited after formation of BSNL in year 2000, demanding “increased wages and career progression”, as well as a demand for absorption of group ‘A’ officers in BSNL. In addition, BSNLEU, a majority union of non-executive employees of BSNL, and its allies are on 48 hours strike on 19th and 20th August 2009, for wage revision.

Impact Of The Strike

BSNL claimed that out of 55,000 of its executives, only 2400 executives are unauthorizedly absent from their duties since 18th August 2009; news reports, however, paint a completely different picture:

The Statesman reported that apart from a few senior officials no one was allowed to enter any of the 500 customer care centres and offices of BSNL in Kolkata. Internet services were disrupted in Behala, New Alipore and Chetla. Subscribers could not access any of the outlets and were not allowed to pay their telephone and Internet bills. SamayLive reports of around 8000 BSNL employees striking in Karnataka, and those in Bangalore taking out a silent protest. Central Chronicle reports of 11000 employees striking in Madhya Pradesh. 10,000 struck work in the Gujarat Circle, as did employees in Nagaland.

Can BSNL Afford To Raise Salaries?

In the past BSNL employees have also opposed the proposed listing of the company several times, even observing an “Anti-Disinvestment Day”. High wage cost has been a cause for concern for BSNL: Profits dropped significantly last fiscal, by 96.5 percent to Rs. 1.04 billion as compared to FY08. For the FY09 fiscal revenues also declined, by 8.1% drop in revenues to Rs. 349.37 billion. Financially, things will only get worse if BSNL raises salaries. As it is, the company is struggling to retain landline customers, and faces tough competition in the mobile space from both old and operators, particularly with the new telecom operators aggressively offering cheaper and/or more innovative plans to consumers. Given that services might be hindered by the strike, and consumers significantly inconvenienced, the strike might end up helping other telecom operators.