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Telecom Services V&D 100

Top10: 1 - BSNL: Leading From The Front

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Voice&Data Bureau
New Update

Bharat Sanchar Nigam (BSNL) maintained its top position
despite the fierce price wars and cut-throat competition from the private
players. It also remained the only significant operator to provide services in
rural areas, even as private operators shied away from their responsibilities.
BSNL's revenue during FY 2005-06 stood at Rs 39,500 crore, as against Rs
36,090 crore in FY 2004-05, a growth of 9.4%.

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BSNL accepts that it is losing approximately 30 lakh fixed
line customers every year. Despite this, it continues to maintain the leadership
position in the fixed line segment, with 72% market share. BSNL generated less
revenue from value-added services, in comparison to other operators. This is one
of the reasons for the decline in demand for its fixed line services. To
overcome this, the company is considering hiring advertising agencies to drive
home the point that landline offers distinct advantages such as voice clarity
and broadband services.

BSNL


Area of operation: Fixed Line, Mobile
Services, Internet and Broadband Services 

Address: Statesman House, B-148, Barakhamba Road , New Delhi-110 001

Phone: +91-11-23372424

Fax: +91-11-23372444

In terms of mobile services, BSNL continued to remain at
the second position with a subscriber base of 18.45 mn and a market share of
20.3%, behind only to Airtel's 19.6 mn. Realizing the need to expand its
wireless network, it plans to add 60 mn GSM lines. The total value of the
equipment is likely to be in the range of $4.8 bn. 

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FY 2005-06 was also significant for BSNL, as it got the 18
mn mobile subscribers. It may be recalled that BSNL launched its mobile phone
services in October 2002. The southern zone continues to lead the mobile
subscriber base, followed by the northern zone.

BSNL's 'DataOne' broadband service was a dampener, as
it remained far  behind the
ambitious target set by the Broadband Policy 2004. It only managed to attain a
subscriber base of 5.86 lakh, as against the targetted 10 lakh subscribers.

HIGHLIGHTS

  • Registered a modest 9.4%
    growth in revenue

  • Got 18 mn mobile
    subscribers in FY 2005-06

  • Invited tender for 45.5
    mn GSM lines

  • Around 45% market share
    in broadband

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The year saw BSNL, besides MTNL, launching the much-awaited
'One India' plan. However, the initial response to the service was cold
because of the non-attractive package, and it was quickly revised.

To check the large-scale surrender of fixed line phones,
BSNL reduced the rental of fixed line services from Rs 250 to Rs 180 per month.
Its corporate customers also got their share of good news, when BSNL slashed the
tariff for leased lines of 2 Mbps and above.

The company won a big contract from United Bank of India
for connecting more than 1,400 centers, so that the bank's customers can use
ATM and other services. BSNL also activated the 1500 number for customer care.
BSNL's VPN subscriber base stood at 15,094 for the year 2005-2006. On the
rural telephony front, the village public telephone number stood at 5.3 lakh.
Not to be left behind in the 3G race, the company has placed a demand for
additional spectrum, and plans to order equipment during September-October 2006.

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'3G equipment will be ordered by
August-September 2006'

How was BSNL's overall performance
last year?

Last year, BSNL provided net 82 lakh new telephony connections. They
include fixed lines and fixed wireless lines and majority of them are GSM
lines. This is by far the highest achievement in one financial year. Last
year, we had provided 52 lakh lines, which is a jump of over 56%.

CMD

AK Sinha

How did you perform in fixed line
telephony during FY 2005-06?

We lost about 36 lakh fixed line customers, but we provided 32 lakh
connections. The net loss is 4 lakh connections. But you have to take into
account the fact that we have provided 9 lakh fixed wireless connections.
So from fixed line and wireless, the net addition is 5 lakh. We have
provided 77 lakh GSM connections, which comes to a total of 82 lakh.
Surrendering of fixed line is a worldwide phenomenon.

How did you perform on the broadband
front?

We provided 5.6 lakh lines. One can say that the target was 6 lakh and
we could not achieve it. Our market share in India is almost 60%. Today,
we have provided broadband in about 300 cities. This is going to increase
to 600 during 2006-2007 and by 2007-2008 we plan to reach out to 1,000
cities. We are going to install 3 mn lines in the next two years. We will
also go for triple play and video-on-demand.

What steps are being taken by BSNL to
stop the surrender of fixed line phones?

We are trying to make landline more attractive by giving CLI based
phones to every subscriber and the phones will have more features. We are
also doing door-to-door marketing and are trying to explain the benefits
of the fixed line. We are also using 'DataOne' benefits to encourage
the use of fixed line phone. All CGMs have been empowered to improve the
tariff with the private operators. We are also trying to bundle landline,
broadband, and mobile connections.

What are your 3G plans?

We have invited tender for almost 60 mn lines for two to three years.
Out of that, in three zones, we have invited tender for 45 mn lines, and
we are in the process of finalizing. The first year's requirement is of
20 mn lines, out of that we plan to launch 3G services with 5 mn lines in
select cities where 3G services will have the potential to sell.

3G equipment will be ordered by
August-September 2006. The only thing we are waiting for is frequency
allocation by the government and we are hopeful that this would be done
soon. We can start services in the first half of 2007.

What are your plans for corporate
customers?

We have created a business development cell. We have got a big
contract from United Bank of India to connect more than 1,400 centers, so
that the bank's customers can use ATM and other services. SBI is our
largest customer. Each circle has one designated corporate account holder
who often meets the bulk customers and looks after their requirements. We
have also activated the customer care phone number.

One hopes to see a distinct brand image of BSNL in the
coming year, much in tune with its strategy to generate more revenue from
value-added services such as triple play and video-on-demand.

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