A recent burst of activity could help BSNL cover some lost ground against its private sector rivals. The company may even reposition itself to become a key player in the Digital India landscape rather than focusing purely on profits.
The PSU has rebranded with a new logo. It has also announced seven pioneering initiatives, namely spam blocking, national Wi-Fi roaming, IFTV for FTTH subscribers, anytime SIM services, direct-to-device services, disaster relief solutions and 5G solutions for mining. Some of these are unique.
It is also, finally, rolling out 4G, and says it will rapidly upgrade the 4G networks to 5G. BSNL is years behind the curve here, but it is pushing fibre connectivity in a more aggressive fashion.
BSNL is aiming to capture a 20 per cent share of the overall mobile market by the end of 2024, and 25 per cent by end-2025.
This is a very tall ask, given its loss of subscribers and lag in roll-out. BSNL has around 90 million subscribers and a 7.5 per cent market share. It lost 18 million customers in the last fiscal year. Its rural roll-out of fibre connectivity for all panchayats is also behind schedule.
The PSU has accumulated massive losses and employs a big workforce. It has nearly 57,000 employees on the rolls. In financial year 2024, BSNL reported a net loss of Rs 53 billion, against Rs 213 billion in revenues.
It will be difficult to cover all the lost ground. But the PSU can still improve operations and may turn itself around financially. If it does so, it could enhance competition in the sector.
BSNL does have an edge in terms of rural fibre connectivity and rural mobile footprint. Indeed, it loses money in part because rural subscribers provide low ARPU, and network roll-outs are expensive.
BSNL could leverage this to reposition itself as an enabler of Digital India. Digital India seeks to ensure that underserved populations get access to digital services, including government services and UPI/banking. BSNL is the only telecom service provider that can deliver rural digitalisation quickly, at a reasonable cost to users.
This is analogous to UDAAN and the railways connecting far-flung destinations physically. The service may not, in itself, be very profitable (though it should ideally be above breakeven), but the connectivity enables commercial activity, in turn driving incomes and generating tax revenues. This may be a better strategy for the PSU as it ultimately leads to a positive outcome for the government.
