Kuldeep Goyal, CMD, Bharat Sanchar Nigam Limited
A 1971 batch ITS officer, Kuldeep Goyal, chairman and managing director, Bharat Sanchar Nigam Limited (BSNL), has his hands full trying to put the brakes on BSNL’s slide and steer it back onto the growth path. In a recent interview with tele.net, he discuses BSNL’s IPO listing and 3G plans as well as future strategies. Excerpts…
Where does BSNL stand in the overall competitive scenario?
BSNL is the number one service provider in India in terms of revenue earned. However, we are number two in terms of customer base.
BSNL’s market share has been slipping over the past 18 months. What is the company doing to arrest the fall?
A decrease in the market share of an incumbent is natural when a sector is opened to competition. During the past couple of years, mobile capacity constraints have prevented us from reversing the trend. Network expansion is now at the final stages of integration. BSNL is trying to stabilise and then increase its market share by taking a number of measures. We are working on introducing various value-added services (VAS) for landline, GSM and broadband including 3G and Wi-Max.Recently, BSNL introduced personalised ringback tones (PRBT) on landlines. IPTV services are being introduced in about 100 cities. We are also planning to introduce voice over IP services soon.
How are the plans for launching extensive CDMA services shaping up?
We have been in the CDMA space for the past four years. Till now, BSNL’s policy has been to provide CDMA technology on a limited area basis. Under this category, we have a capacity of more than 6.5 million connections, out of which 4.5 million WLL connections are working on BSNL’s network. With the release of additional spectrum and the government giving permission to offer GSM as well as WLL services, BSNL is planning to launch fully mobile CDMA services in addition to the existing GSM services.Technical planning for fully mobile CDMA service is in progress.
What growth trends do you foresee and which segments are likely to do better?
The growth segments of telecom will coninue to be 2G/3G mobile and broadband services. It is expected that 2G/3G will continue to be the leading revenue generators for telecom operators. We also expect to generate additional revenues in the VAS and broadband segments.
What are BSNL’s key thrust areas?
BSNL will strive to meet the demand for all services and improve the user interface to enhance customer satisfaction by providing quality services at the doorstep.
What are BSNL’s plans for extending its services overseas?
BSNL is exploring possibilities in foreigntelecom markets. We are initially looking at bidding for new licences abroad.
What is your outlook on the wireless business?
BSNL is in line with the government’s target of achieving at least 500 million wireless connections by 2010 and 750 million by 2012, through an annual addition of 100-120 million.
What are BSNL’s investment plans?
We plan to invest approximately Rs 150 billion every year for the next three years. We are in line with the investment plans for the current financial year.
What are the plans on the enterprise front?
Since BSNL is the largest fixed line operator in the country, practically all large enterprises are our customers as all of these need wireline networks. But now, what we are trying to do is to provide these enterprises a complete suite of end-to-end solutions and IT services.
What is BSNL’s view on the government’s plan to merge ITI with BSNL?
ITI Limited presented to the government its proposal, which was then sent to us. After studying the proposal we found that there are no synergies between BSNL and ITI because BSNL is a service provider and ITI is a manufacturing company. No service provider manufactures its own equipment because it wants to source the best equipment at the best prices, for which various options have to be explored. Tying up with only one equipment manufacturer or manufacturing just a particular equipment may not be commercially the best for BSNL.
BSNL’s proposed initial public offering (IPO) is also an issue as a merger with ITI might affect the IPO process. So, concerns like these would be considered by the government before taking any decision on the merger.
How far has BSNL moved on the IPO front? What is the expected valuation?
We have recommended to the government that it may divest about 10 per cent equity stake in BSNL to the public. Now it is up to the government to take the decision. Regarding issues like employee union protests, we have explained the benefits of listing to the union. The staff in general appreciates the plan.
The valuation has not been worked out yet. It will only be done once we appoint a consultant or a merchant banker. Right now, it is premature to say anything about the valuation.
What are BSNL’s main concerns?
The major challenge before BSNL today is the capacity constraint in mobile services, which is being addressed by deploying around 25 million GSM lines across the country. Starting October, we have initiated the process of adding capacity in various states.
As an incumbent, the downward slide of landline services is another important concern. BSNL is trying to address this problem by popularising ADSL2+ broadband services and by offering VAS like PRBT on landlines.
The other concerns include enhancing quality of service (QoS) and customer interface, for which we have already formed a plan of action.
What steps are being taken to improve QoS and customer interface?
We are taking multi-pronged action on this front. First, we are working to remove network congestion completely by optimising our network. Trials have already been done for the mobile network. For points of interconnection, we are starting a drive to remove congestion between BSNL’s points to the other operators’ points and vice versa. Second, we have appointed an external agency for bench-marking our network vis-a-vis other operators to see where we stand.
To improve customer interface, our staff will from now get in touch directly with the users for one-to-one interaction.This will be in addition to the normal call centres. We are also setting up zone-wise call centres for wireline and broadband customers. These are likely to be operational by the end of 2008-09.
0f late, BSNL is looking more aggressive and is slated to launch products and service, like 3G and BlackBerry. When can these products be expected?
BlackBerry services should be launched in a couple of months. We are expecting a good response because BSNL has a large customer base that is in need of services such as access to emails, etc.
Now that we have received 3G spectrum, we expect to launch 3G services in December 2008 or January 2009.
What challenges do you foresee as BSNL launches these services? What kind of market do you expect for 3G in India?
Customer education and the handset price barrier might be the major challenges faced from the customer side. As far as BSNL is concerned, we may have to plan a very smooth “go to market” strategy with critical VAS like video telephony, video conferencing, etc., provided along with 3G. Initially, the high-end customers are expected to experiment with 3G services. In the future, 3G’s popularity will depend on the type of services bundled with it by the operators, as well as on the price difference between 2G and 3G services. “
