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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).
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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.