BSNL's 1.76 lakh employees consume 55 per cent of its revenue

State-run BSNL, which is trying to overcome liquidity crunch and financial squeeze, has undertaken fresh measures to cut avoidable expenditures on contract labour and do a cost-benefit analysis of the legacy landline and broadband exchanges as well as towers to achieve network optimisation.

"During the various review meetings with the higher management, the liquidity position and financial crunch in BSNL had been discussed and it was decided to issue necessary instructions/guidelines immediately to reduce the expenditure in the various items including outsourcing Contract Labour," said a letter from BSNL's corporate office on June 4 to all circle heads across the country.

These contract labours who are outsourced by BSNL are hired for administrative/operational activities in fields -- housekeeping, security and data feeding.

The BSNL management has decided to review all outsourced labour contracts to reduce expenditures and generate savings and after the review the performance status report should be submitted by the circle heads by June 20.

"Hence, suitable measures may be taken to reduce expenditure on outsourcing in the administrative/operational activities in field -- house keeping, security and data feeding. Thus a through review of all outsourcing contracts involving labour should be done with a view to reduce expenditure and obtain savings," the letter said.

The letter further adds: "Next quarters payment may be released only after it is certified by the CGM that such a review has been done. The action may be taken in cases where revenue generation is minimal or less compared to expenditures incurred on the same other than salary expenditures."

The corporate office which is the headquarter of the PSU (public sector undertaking) has also directed the circles taking austerity measures on network optimisation.

The PSU in the last past three months had instructed its circles to do a review of landline exchanges, broadband networks elements, and towers in the context of revenue earned from such exchanges or towers and the expenditure done on the same to achieve network performance optimisation.

"It has been directed that analysis may clearly point out exchanges which are critical to network or have potential for revenue increases to offset the losses due to high expenditure on such exchanges," said the communication.

The PSU has sought performance status report by June 20.

BSNL is expecting normalcy in cash flows in the second quarter (July-September) of FY20, according to its Director (Finance) who had blamed the "predatory pricing" for the current crisis in the sector and in BSNL.

"The liquidity position of the company may start improving and normalcy could be restored in the next quarter," SK Gupta, BSNL director (finance), had stated in a May 16 letter to the chief general managers and financial advisors of all its telecom circle heads and district maintenance regions.

BSNL has been incurring losses for the last many years and except in 2014-15 where it had got an operating profit of Rs 672 crore. BSNL had registered a profit of Rs 10,000 crore till 2004, but recorded a loss of Rs 8,000 crore during the next ten years. Its 1.76 lakh employees consume 55 per cent of its revenue which is also falling due to hyper competition.

The severe liquidity crisis earlier this year pushed BSNL to delay salary of February by one-and-half-months.