With more than 90,000 towers and 801,000 route km of optical fibre cable (OFC) network, Bharat Sanchar Nigam Limited (BSNL) has one of the largest asset portfolios in the Indian telecom market. While most of these assets were developed as captive sites, in recent years BSNL has monetised them by sharing them with other operators and industry stakeholders. Today, BSNL offers over 300,000 leased tenancies to other tower companies to help them meet their coverage requirement and undertake business expansion. BSNL is also actively engaged in various government initiatives. However, there are significant challenges that have made it difficult for the operator to increase its revenue pool. As highlighted by BSNL, a positive policy action on the government’s part will go a long way in addressing some of these challenges.
A look at BSNL’s project portfolio, the key challenges it faces and its recommendations to the government…
Progress under government initiatives
BSNL is one of the implementing authorities of the BharatNet project, which is being undertaken in phases. Under Phase I, 247,995 km of OFC has been laid, covering 102,000 gram panchayats. Under Phase II, 400 km of OFC has been laid, covering more than 3,000 gram panchayats.
BSNL has also rolled out a pan-India exclusive OFC network for defence forces under its Network for Spectrum project. The project entails laying 57,015 km of OFC for the army and 2,900 km for the navy. Of this, 53,349 km and 1,695 km has been laid. Under this project, BSNL has also established a GIS-based optical fibre network management system, which includes satellite imagery-based application and monitoring of OFC routes.
BSNL has also been working towards boosting connectivity in the left-wing extremism-affected areas and has provided mobile coverage to villages as well as army camps in 33 districts across the 10 Naxal-affected states. A total of over 2,000 base transceiver stations have been set up, covering 10,000 villages. BSNL is also implementing a project to connect the uncovered villages of Arunachal Pradesh and two districts of Assam. In addition, it is working on an optical submarine cable system, which seeks to connect Chennai and the Andaman & Nicobar Islands.
BSNL’s infrastructure initiatives
In terms of infrastructure capabilities, BSNL has manufacturing facilities in seven locations. It manufactures products such as SIM cards, splice closures, PLB HDPE telecom ducts, SS drop wire, line jack units, OFC accessories and jointing kits. BSNL’s internet data centre portfolio consists of colocation services, hosted services, managed services and cloud services. It is the only authorised global satellite phone service provider in the country. At present, about 5,300 customers from the army, air force, navy, anti-Naxalite police force and the shipping industry are using these services. Recently, BSNL has obtained in-flight and maritime connectivity licences from the Department of Telecommunications.
BSNL in smart cities
BSNL is also actively engaged in the smart cities segment. It has set up integrated command control centres and 25,000-30,000 Wi-Fi hotspots, and developed the network backbone in various cities. It has also undertaken multiple traffic enforcement projects in different smart cities, as part of which over 1,500 city surveillance cameras have been installed. In addition, BSNL has deployed its ICT-based solid waste management solution and toilet feedback polling in more than 100 urban local bodies.
The rising capex requirements, low margins and stringent regulations are the biggest challenges faced by operators. They are required to make substantial investments in telecom and broadband infrastructure to support the exponential growth in data traffic. On the policy and regulatory side, high tax rates, licence fees, spectrum usage charges, interconnection charges, as well as fluctuation in duties on telecom equipment continue to negatively impact operator earnings. Further, difficulties faced in obtaining right-of-way permissions and associated high costs are a pain point.
Emerging policy needs
There is a serious need to treat telecom as any other infrastructure sector, and consequently extend all the associated benefits such as incentives, lower taxation, rational licence fees and tax-free bonds to telecom companies. In addition, levies on spectrum payments such as goods and services tax should be waived. There is also a need for a proper framework on adjusted gross revenue. Further, a reclassification of common telecom infrastructure should be done so as to allow infrastructure providers to deploy and lease all their telecom assets under the infrastructure sharing model. Given that there has been no growth in the revenue pool of operators vis-à-vis the capex, which has grown by 15-20 per cent, there is a need to adopt the infrastructure sharing model. s
Based on a presentation by Shubha N. Bhambhani, Principal General Manager (C&M), BSNL