It was a year of mixed results for the public sector telecom giant. BSNL scored a 20 percent growth in revenue s, up from Rs 25,893 in FY 2002–03 to Rs 31,000 crore in FY 2003–04 (the figure includes a Rs 2,300 crore grant from the government). On the expenditure side, it became the largest spender on license fees—Rs 2,200 crore. Capital expenditure of the company stood at around Rs 10,000 crore in the last financial year.

BSNL has maintained its lead in fixed services. Though the rate of subscriber growth slowed down to below three percent, it had over 84 percent market share in this segment. No other company came even close to challenging the undisputed Maharaja of telecom. It had a fixedline subscriber base of 35,435,637 and in wireless fixed phones it had 958,792 subscribers. It also appears that the PSU is solely responsible for wiring the villages with 509,491 village public telephones  (VPTs).

Reworking to Keep Pace The PSU behemoth plans to expand massively and become a total telecom solutions provider Acting CMD: VP Sinha AREA OF OPERATION: Integrated services Address: Statesman House B-148, Barakhamba Road New Delhi - 110001 Tel: 011-23372444, 23372424 Website: www.bsnl.co.in V&D estimates CyberMedia Research Highlights l Revenue up by 20 percent to Rs 31,000 crore l Massive expansion plans on the anvil including 15 million cellular lines l Targets five lakh DSL subscribers l Focus on VAS and data services to increase ARPU l Leadership in fixed services, NLD, and Internet services

While the growth in mobile users was good news for the market, the fallout came with BSNL subscribers surrendering their fixed phones. However, the numbers were too small to bother the company. But the company will have to soon check the slide of its ARPUs which went down from Rs 518 to Rs 500 in FY 2003–04.

BSNL´s cellular offering retained its charm among the users and it has over 6.15 million subscribers in CDMA and GSM offerings. It was the fourth largest service provider with cellular revenues of Rs 1,984 crore. Of these, 66 percent were prepaid users and the remaining 34 percent were on postpaid plans.

It is the third largest cellular operator in terms of subscriber base. Though the growth crossed 123 percent, it was not as good as Hutch, Reliance, and Tata Teleservices; but it was better than Bharti´s. A shortage of lines was the main hurdle in adding more users. This year the company plans to add another 15 million lines and expand its network from the current 1,800 cities to 4,000 cities by December 2005. BSNL is also planning to expand its CDMA network from the current 80 cities to 2,645 cities this financial year, mostly in the rural areas.

BSNL has chalked out plans to increase the cellular ARPU by providing a range of value-added services. On the broadband front, the company has signed franchisee agreements with Atlas and iSpatial.

The PSU has also expressed its desire to share infrastructure and enter into tie ups with other companies to maintain its market leadership. It is already sharing it towers and buildings with Konkan Railways and RailTel, and has joined hands with Indian Oil to sell its Excel prepaid cards.

Earlier this year, BSNL forced a massive cut in the ILD and NLD rates in the country. It already leads the NLD market and is planning to activate its ILD license this year, to become the fifth ILD operator in the country. With all the price cutting, the revenues from NLD services came down by 18 percent to about Rs 4,510 crore. On the data connectivity side, its MPLS backbone will be extended to 71 cities, from the current 10 cities.

In Internet services, BSNL has a subscriber base of 934,950 and revenues of Rs 308 crore, mostly from the dial-up segment. BSNL is also planning to enter the DSL segment on its own. This year it is the targeting five lakh DSL subscribers. If the already laid copper is used properly and tariffs are kept low, this target is quite achievable.

BSNL is strengthening itself to compete with private service providers and has joined hands with system integrators like CMC, HCL Info, and Datacraft for this purpose. If these plans are any indication, its competitors need to brace for some tough times ahead.