Bsnl Staff Threaten Stir Against Ipo

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NEW DELHI: State-owned telco BSNL’s workers’ unions have threatened to go on an indefinite strike if the government goes ahead with the telecom operator’s IPO as well as with its proposal to merge ITI with BSNL.

“BSNL is in a financial crisis and any move to merge ITI, a loss-making company, with BSNL will have a disastrous effect on both,” a statement by BSNL Employees Union said.

Earlier, the government had twice put on hold plans to list BSNL due to strong protest by its workers and Left parties. However, having won the trust vote in Parliament, the government is looking at reviving BSNL’s IPO plans.

“The contention that listing is necessary for expansion and development as also grant of Navaratna status is not acceptable. Other PSUs including HAL have been granted Navaratna without listing. As such, the arguments put forth for IPO in BSNL, are nothing but lame arguments to disinvest BSNL and gradually privatise, as in the case of Videsh Sanchar Nigam (VSNL),” the statement added.

After its meeting on Thursday, the joint forum of BSNL associations/ unions of three lakh workers forwarded its resolution of going on an indefinite strike if the government proceeds with the merger and IPO to the Prime Minister, communications minister, department of telecom secretary and BSNL CMD. The joint forum will meet again to review the situation on August 1, 2008.

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BSNL board clears $10-b IPO plan

2 Aug, 2008, 0003 hrs IST, ET Bureau

NEW DELHI: The BSNL board has cleared the company’s proposed $10-billion listing, a top Department of Telcom (DoT) official told ET on Friday. This will bring the company in direct conflict with its employee unions, which have threatened to go on an indefinite strike if the PSU goes ahead with the IPO.

When contacted, a top BSNL executive said: “The BSNL board has recommended the IPO and asked the government to facilitate the listing of the company.” The executive also added that the company has already begun the process of appointing merchant bankers.

On July 24, ET had reported that the government had initiated steps to put state-owned telecom major BSNL’s proposed $10-billion listing back on track. The report also said the finance ministry had asked BSNL to start preparing for the country’s largest-ever listing.

The unions are against the BSNL management’s contention that listing is necessary for expansion and grant of navaratna status. “It is also decided that if the government moves with the IPO proposal, the entire BSNL workforce of three lakh will get into direct action, including indefinite strike. Other PSUs, including HAL, have been granted navaratna status without listing. As such, the arguments put forth for IPO in BSNL are a ploy to disinvest BSNL and gradually privatise it like Videsh Sanchar Nigam (VSNL),” the employee unions of the PSU said in a statement late Thursday night.

Faced with opposition from its unions and the Left parties, the government had shelved BSNL’s IPO twice.

The DoT official said the government would try and bridge “differences between the BSNL management and its employee unions, to ensure that talks between the two sides continue and all outstanding issues are addressed”. BSNL sources also added that the PSU was planning to offer ESOPs and other packages to employees to win their support for the IPO.

It also plans to deploy a portion of the proceeds for a new pension package and for training and redeployment of its employees.

If BSNL does manage to raise Rs 40,000 crore by selling a 10% stake, the telco would be valued at Rs 4,00,000 crore (around $100 billion). This will catapult BSNL into the league of top telcos in the world in terms of market cap. Incidentally, the market valuation of Bharti Airtel is just around $37 billion.