Will the revival package offer a fresh lease of life for ailing BSNL?, Telecom News, ET Telecom

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Will the revival package offer a fresh lease of life for ailing BSNL?, Telecom News, ET Telecom

Private telecom players will soon launch 5G, while loss-making state-run BSNL (Bharat Sanchar Nigam Ltd), which is moving at a snail’s pace, is yet to launch its 4G mobile services.

From the second largest mobile player with a profit of Rs 10,000 crore around 2005 to a struggling loss-making entity, BSNL has come a long way.

Due to non-availability of 4G services, BSNL has already lost huge market share to private telecom operators over the last few years and has a modest 10% market share in the market.

To help BSNL maintain and promote healthy competition in the sector, the government recently approved a Rs 1.64 lakh crore revival package and expects the ailing PSU to become profitable by the 2026-2027 financial year. Revival measures include infusion of fresh capital for upgradation of BSNL services, allocation of spectrum, de-stressing of balance sheet and expansion of fiber network by merging Bharat Broadband Nigam Limited (BBNL) with BSNL.

However, this is not the first time that the government has come to BSNL’s rescue. In 2019, the government had announced a package fund of Rs 70,000 crore BSNL and MTNL’s voluntary retirement scheme as staff costs were the main reason for the company’s retrenchment.

It is crucial for the government to keep BSNL up and running due to the fact that telecom is a strategic sector. In the border areas, left wing extremist areas etc BSNL’s presence is paramount. BSNL also acts as a market balancer. Moreover, areas – rural and remote areas – where it is not commercially viable for private players to venture BSNL offer services.

But will the new revival package breathe life into BSNL?

There will be many challenges – the competition in the telecommunications sector is intense. With the entry of Reliance Jio, the sector has consolidated into a market with three private players, with one of the players Vodafone Idea also struggling to sustain.

Currently, BSNL has revenues of 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 expense despite offering VRS to its employees.

With the recent completion of India’s first 5G auction, private players are planning to launch the services within this year. In contrast, BSNL’s launch of 4G services domestically has been delayed due to several reasons. BSNL is in the process of deploying Atmanirbhar 4G technology stack and a pan India 4G rollout is still 18-24 months away. TCS has done proof of concept for BSNL 4G and prepared 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 launch 5G.

Private telecom operators including Reliance Jio, Bharti Airtel and Vodafone Idea have already taken the 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 hand is promoting Indian technology in line with the government’s vision of Atmanirbhar Bharat, but is also taking a business risk. Time will tell.

Nevertheless, BSNL needs to emerge as an agile and responsive telecom service provider offering effective customer service. It also needs to look beyond its traditional market of rural and remote areas and enter lucrative markets that offer the same value and customer service as those offered by private players. Online presence – on social media and quick resolution of issues and offering other services to consumers through mobile applications can help BSNL learn new tactics for users in a digital environment.

Last, but not least, is the employee’s mindset and upskilling. As India moves into a fully digital economy, corporate 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 turn BSNL around.

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