Private telecom players will soon launch 5G while loss making state run BSNL (Bharat Sanchar Nigam Ltd) moving at a snail’s pace is yet to launch its 4G mobile services.
From the second biggest mobile player with a profit of Rs 10,000 crore around 2005 to a struggling loss making unit, BSNL has traversed a long road.
Due to non availability of 4G services, BSNL has already lost huge market share to private telecom operators over the last few years and holds a meagre 10% market share in the market.
To help BSNL sustain and promote healthy competition in the sector, the government recently approved Rs 1.64 lakh crore revival package and expects the sick PSU to turn profitable by fiscal year 2026-2027. Revival measures include infusion of fresh capital for upgrading BSNL services, allocating spectrum, de-stressing its balance sheet and augmenting its fiber network by merging Bharat Broadband Nigam Limited (BBNL) with BSNL.
However, this is not the first time that the government has come to the rescue of BSNL. In 2019, the government had announced a Rs 70,000 crore package fund BSNL and MTNL’s voluntary retirement scheme as employee cost was the main reason which was dragging the company down.
It is critical for the government to keep BSNL up and running owing to the fact that telecom is a strategic sector. In the border areas, left extremism areas etc, BSNL’s presence is paramount. BSNL also acts as a market balancer. Besides, areas – rural and remote – where it is not commercially viable for private players to venture BSNL offer services.
But will the new revival package infuse life in BSNL?
There will be many challenges – competition in the telecom sector is intense. With the entry of Reliance Jio, the sector has consolidated to a three private player market where one of the players Vodafone Idea is also struggling to sustain.
Currently, BSNL has revenues at around Rs 19,000 crore while expenditure is around Rs 18,000 crore with an operating profit of Rs 1000 crore. The company still has a huge expenditure despite offering VRS to its employees.
With the recent conclusion of India’s first 5G auction, private players plan to launch the services within this year. In contrast, BSNL’s launch of 4G services indigenously has been delayed due to multiple reasons. BSNL is in process of deploying Atmanirbhar 4G technology stack and a pan India 4G rollout is still 18-24 months away. TCS has been doing proof of concept for BSNL 4G and gearing up to commercially deploy it. BSNL may launch 4G and 5G in parallel. BSNL’s consumers are at a loss as its 4G launch may come when private players will be launching 5G.
Private telecom operators including Reliance Jio, Bharti Airtel and Vodafone Idea have already taken a lead in 4G and it would be difficult for BSNL to keep up the pace.
It will be a tightrope for BSNL which on one side is promoting Indian technology in line with the government’s vision of Atmanirbhar Bharat but at the same time taking a business risk. Only time will tell.
Nonetheless, BSNL needs to come out as an agile and receptive telecom service provider, offering efficient customer services. It also has to look beyond its traditional market of rural and remote areas and enter into lucrative markets offering similar value and customer services as that being offered by private players. Online presence – in social media and quick resolution of issues and offering other services to consumers via mobile application could help BSNL in learning new tactics for users in a digital environment.
Last but not the least, is the employee mindset and upskilling. As India enters into a fully digital economy, the company’s employees need to upskill with the changing times. As telecom minister Ashwini Vaishnaw said “perform or perish” will be the norm and a new normal for BSNL employees.
A tough road ahead for BSNL before it proves its mettle. Hope this revival package, which itself is a four year plan, will stir BSNL towards a turnaround.