GSM is present, and CDMA is going to be the future

Prithipal Singh, the soft-spoken chairman and managing director of
Bharat Sanchar Nigam Limited, knows well where to be aggressive. BSNL’s
success in the cellular business is an ample proof of that. In an exclusive
interview with VOICE&DATA, Singh outlines what one can expect from
BSNL in the near future:

You have been saying that growth will now come from wireless. So what
happens to the fixed business?

For the past six to seven years, we have consistently maintained a growth
rate of about 22—25 percent in fixed lines. We have now nearing a saturation.
Therefore, it is now the turn of wireless to grow.

India
still has a low tele-density, and both fixed and wireless technologies have
significant but slightly different roles to play. Being a very mature
technology, fixed still has an edge over wireless in terms of voice quality and
the access bandwidth that it can deliver to end-customers. Wireless technologies
focus on providing mobility; they are also more cost-effective in terms of capex
requirements, and will therefore continue to exhibit strong growth in India in
the near future.

Our strategy in fixed lines business will be to consolidate our existing base
and further bring down fault rates. We shall provide increased number of
value-added services such as broadband on our copper loop, providing services
such as high-speed always-on Internet access and video-based services. Corporate
houses still require fixed line because of its excellent voice quality, and
therefore there shall be growth in the fixed line business also for some more
time, though the growth rates may not be of the same scale as in the wireless.

What can we expect from BSNL in the near future on the broadband service
front?

For broadband services to really take off, the important factors are
connectivity and content, and above all, the pricing. Quality and locally
relevant content has to be built up, in order to provide residential customer
the incentive to exploit and enjoy the capabilities of broadband services. Most
of the content still resides outside India, which adds to the transportation
cost and therefore makes the total solution expensive. Besides, the content is
not customized to local needs. We intend to stimulate local content creation by
opening up our network. As such, BSNL customers can look forward to enjoying
high-speed Internet access through expansion of our DIAS services, and broadband
services for our fixed line customers though our franchisees in selected cities.

Are you considering the same kind of aggressive market strategy for CDMA
services as GSM?

At BSNL, it is customer demands and perceptions that play an important role
in defining our strategies and focus areas. GSM is more established nationally
vis-à-vis CDMA, in terms of providing seamless mobility and wider availability
of attractively priced handsets. However, CDMA is certainly the technology of
the future, and as the market matures and customers look forward to services
other than basic connectivity, CDMA will have a greater role to play.

Already, BSNL is using CDMA in a major way to meet rural telephony demands.
CDMA is more cost effective than wireline technologies for providing basic
telephony services. In all, BSNL plans to add about 2 million line capacity
through CDMA this year to enhance rural and urban connectivity.

Excepting SMS, mobile data services haven’t picked up in India. Can BSNL
change that?

BSNL can certainly give a big impetus to growth of mobile data services by
making use of cost-effective technologies and leveraging its economies-of-scale
and national footprint. We plan to add GPRS capability to our GSM infrastructure
in the near future, and upgrade it with EDGE and other 3G technologies as the
demand picks up.

Are you open to partnerships with small service providers for marketing
BSNL’s services?

We are open to any approach that can catalyze customer demand, and help us
provide better telecom services. Building synergies through partnerships and
franchisees is certainly one of our primary thrust areas. We have made use of
franchisees and dealers in marketing our GSM services. We are looking at
partnerships with banks (for prepaid recharge through ATMs), media-based
companies (for providing SMS, IVRS-based content services and broadband
services), and handset manufactures.

Ravi Shekhar Pandey