Current Affairs

Moshahida Sultana Ritu

Silence! Another magic spell in Fakhruddin’s basket. Land phone subscribers are happy. They used to pay Tk 1.5 per five minutes before. Now they have to pay only Tk 0.15 per minute. It is a magic. Let us check why some people are so happy when some people are so powerlessly lost in the magic spell.

IT WAS July 1, 2008. The Bangladesh Telegraph and Telephone Board was converted to a public limited company – the Bangladesh Telecommunications Company Limited. Public limited company is a type of limited company which is permitted to offer its shares to the public. The designation was introduced in the United Kingdom by the Companies Act 1980 and in the Republic of Ireland by the Companies (Amendment) Act 1983. In case of the BTTB’s conversion to the BTCL, the Bangladesh government initially owns all shares of the BTCL but intends to offload shares in the next one year for public. The value of the BTCL is estimated to be Tk 15,000 crore. The BTCL initially starts with a total of 12,636 officials and staffs of the BTTB and more than 8.5 lakh subscribers.

Initially, the debt of the BTCL was estimated to be Tk 4,237 crore. When Detacon, a German consulting firm, estimated the assets and liabilities, the liability of the BTCL was found to be Tk 9,174 crore more than the estimated assets it owns. The difference in the two figures – Tk 4,237 crore and Tk 9,174 crore – does not merely demonstrate a discrepancy in the evaluation procedure. It is a political decision that leads to this discrepancy. In Detacon’s estimate the price of 2000 acres of land is only Tk 1. According to the consulting firm, the BTCL does not have any legal authority on government-owned lands. Therefore, the discrepancy mainly stems from land valuation. Now, the question is: How does the public perceive these two figures? Could it be easier to justify BTTB restructuring, if the debt figures could be higher?

The BTTB used to contribute Tk 1,300-1,500 crore to the public exchequer every year and used to receive Tk 100-150 crore from the government budget. On average almost 50 per cent of the total earning used to be generated from international calls and the rest inland calls. The Bangladesh Telecommunication Regulatory Commission has leased out the international call service units to four private companies. The condition is 50 per cent of the earning should be given to the BTRC.

Submarine cable system that took birth in 2006 in the womb of the BTTB has now been separated to found a new public limited company – the Bangladesh Submarine Cable Company Limited. When the time came for the BTTB to make use of the submarine cable effectively and offer greater benefit to the consumers, this major source of revenue was taken away from its control. Now, the BTCL has to pay a rent of more than Tk 100 crore for using its previously owned STMs. It is like the owner paying rent for using its own property. The BTTB used to earn revenue from submarine cable system and used to earn additional revenue by leasing out STMs to foreign companies. This source of earning is no more under the newly-created BTCL’s control.

The new public limited company BTCL has lost control over more than 50 per cent of revenue earning source. The rest of the source of revenue is inland calls. It is estimated that if the number of user does not increase, or if the already existing users do not increase use of land phones, the new public company will earn only Tk 80 crore to Tk 100 crore at Tk 0.15 per minute rate. To earn the previous level of revenue the new public limited company needs 10 times more use of land phones than before.

The moment you question the future existence of this new public limited company, the business faculties and business degree holders are going to shower you with managerial buzzwords like ‘efficiency’, ‘motivation of employees’, ‘effective marketing’, ‘strategic planning’ and what not! I am sure that a privileged class of people of our society will come up with comments like ‘government employees don’t work’, ‘sack the old employees’, ‘recruit new’, ‘motivate the old and increase efficiency’. What a magic spell!

The BTTB stopped recruiting Class III and IV employees in 1984. This means the employees who are working here are mostly aged 50 and above. Anybody who would expect to motivate these 50-up employees to achieve hyper efficiency will probably not need god’s blessing but, maybe, will need the government’s blessings. There are well-trained and motivated employees working at the BTCL too. These higher level employees are facing the challenge of making the users make 10 times more calls than before and talk 10 times longer than usual. We are living in a time when people have learned to enjoy the mobility of cell phones and they find it less and less convenient to use landlines. How realistic is it to increase the number of subscribers through advertisements? In fact, in the past few months, the number of landline subscribers has actually decreased more than it has increased.

The major advantage of a public limited company is that it may greatly increase capital as people are allowed to buy shares of the company. It makes the company expand easily. Shareholders have limited liability. While the company has this money permanently, the individual owners can recover their money by selling their shares to others. The main disadvantage of a public limited company is that it is extremely vulnerable to investors’ and bankers’ perceptions about its progress and success. Anyone from public can take over the company if they manage to gather over 50 per cent of the shares, which can then create problems for the company. The difference between private and public limited companies is that a public company can offer initial public offering and raise capital from the public, whereas a private limited company cannot offer any IPO to the public.

When efficiency is a concern, another question arises: Why was this restructuring process done so hastily? Though the ministry had approved 12,636 posts, no plan was made to manage this human resource effectively. If the restructuring intends to improve efficiency and deliver better services to the citizens then why the restructuring process was started so haphazardly? Without proper planning, now the newly-founded BTCL is sitting on the fence, heading towards an unknown direction. This is again a political question. This restructuring would have never been possible had there been a political government. Then who is playing behind the scenario? It will be worthwhile to mention that the World Bank under the state-owned enterprise reform programme is supporting the telecommunications sector through a technical assistance operation that focuses on improving the regulatory environment and strengthening the policy function at the Ministry of Posts and Telecommunications.

The government has shown its magic. Now, the people will wait to see the magic of the BTCL. If the BTCL fails, people will still be happy. Who cares how much the BTCL is earning or how much salary it is offering to the employees. Moreover, middle-class people like to think that government employees do not work; they seek solace in accusing government employees.

The new Public Limited Company has given a condition to the employees that they cannot voluntarily retire in the next two years. This is a basic violation of human rights. In two years this great nation will not observe any firing of employees in the name of efficiency. Had the employees left the job after the reforms, the public would perceive it as an unfavourable consequence of the reform. To be on the safe side, the rules have been set in such a way that it may leave the public perception undamaged and at the same time pretend to serve the needs of consumers.

In this whole process the immediate sufferers are the BTCL employees who no longer receive the government benefits they used to receive before. By emphasising more on the blame-game attitude towards government employees for their corrupted bureaucratic practices than on the consequence of restructuring, society is disregarding the direction to which the whole economic system is moving. If we overlook the interest of the employees, no matter how many times the state-owned enterprises are restructured; the whole economy is going to stumble again and again. To ensure welfare there is an immediate need to plan human resource management in such a way that all interest groups or stakeholders may obtain the fair share of the benefit from restructuring. The BTCL should offer golden handshake opportunity to the employees who want to retire. By saying pleasant goodbye to the redundant workforce, the BTCL may manage to offer higher remuneration to the efficient workforce to encourage their stay.

To ensure sufficient revenue generation from the owned assets, the BTCL may also take measures to utilise the assets in such a way that it may increase its revenue earning and offer higher benefits to the employees. Highlighting the liabilities of the BTCL will only cripple the potential of the company. Instead, efforts should be made to demolish some of the dilapidated old establishments and use the resources in such a way that the BTCL may generate revenue and grow as a public company without any ‘so-called popular’ need for further privatisation.

Moshahida Sultana Ritu is a faculty member at the Department of Economics and Social Sciences, BRAC University.