BSNL, MTNL chiefs may come from private sector

Top managers from the private sector may soon be invited to apply for running state-owned telecom companies Bharat Sanchar Nigam Ltd and Mahanagar Telephone Nigam Ltd.

The department of telecommunications has agreed to set up a search committee to look for new chairmen and managing directors for both, as suggested by the Sam Pitroda-led committee on the organsiation's revamp.

Pitroda wanted not only the chief operation officer-cum-managing director, but other senior posts to be also open to selection from among experienced private sector managers.

This would mean taking BSNL and MTNL out of the purview of the Public Enterprises Selection Board, which selects professionals for public sector units.

The telecom department has sent a letter to the Prime Minister's Office for this same, a senior official told Business Standard. The selection committee would be headed by the Cabinet secretary.

The PMO had earlier asked the department of telecommunication to form a committee to select the BSNL CMD in line with Pitroda's recommendations for recruiting the top management from the private sector.

DoT said this process would take time, so the government should select the BSNL chief as in the current procedure, through PESB.

Through PSEB, 19 candidates had already applied for the post. The last date for doing so was December 2009.

While for the last six months a director has been handling the responsibilities of the MTNL CMD, as an extra charge, the current BSNL CMD is retiring this month.

MTNL's director (technical), Kuldip Singh, was given additional charge of handling the post of CMD.

The Pitroda committee had said the government should also pay people so selected from the private sector a market-linked salary.

BSNL has been losing ground steadily to private competition.

Its current market share is barely 12 per cent. It was also giving tough competition to market leader Bharti Airtel about two to three years earlier, but now has slipped to the fifth position.

The procedural delays related to the purchase of equipment and dependence on government for decision making are hampering the company's growth. Its 93-million-line GSM tender was cancelled due to various controversies. The company is facing a huge capacity crunch in many places.

The company is expected to make losses for the first time in 2009-10, of about Rs 2,600 crore (Rs 26 billion).

For the nine months ended December, the company made a profit of merely Rs 150 crore (Rs 1.5 billion), but has to pay out over Rs 3,000 crore (Rs 30 billion) as pay arrears.