State-run telco Bharat Sanchar Nigam Limited (BSNL) took major strides in 2022. The biggest highlight for the telco remained the merger of Bharat Broadband Nigam Limited (BBNL) with BSNL, which will help it gain access to an additional 0.585 million km of optical fibre network across gram panchayats (GPs). During the year, a revival package worth Rs 1.64 trillion was also approved for BSNL to help it improve its quality of service and de-stress its balance sheet. Further, the Department of Telecommunications decided to allocate spectrum worth Rs 620 billion to the operator for rolling out 5G services by August 2023. P.K. Purwar, chairman and managing director, BSNL, spoke about the company’s key focus areas and 4G roadmap at various industry events during the past year. Edited excerpts from some of his addresses…
BSNL is playing an important role in the roll-out of BharatNet and has constructed the infrastructure for nearly 60 per cent of connected GPs. BSNL is executing several projects to drive mobile connectivity in rural areas and the left-wing extremism-affected areas in cooperation with the government. BSNL has rolled out nearly 2,400 mobile towers with the cooperation of the Government of India.
Today, we have 8,000 micro private partners with us, who have rolled out fibre-to-the-home (FTTH) connections for 2 million subscribers, of which 40 per cent are in rural areas. BSNL is investing in both access network and backbone networks. We are at the forefront of providing services in rural areas. Nearly 90,000 of our exchanges are in rural areas. Meanwhile, 50 per cent of our wireline subscribers and 40 per cent of our wireless subscribers come from rural areas.
BSNL’s market position
Today, BSNL is an operationally stable organisation and on the right path, with a market share of 10.25 per cent. We are looking to place an initial order of 4G equipment for 50,000 sites following the successful outcome of our proof of concept (PoC). The only challenge is the interest outgo on debt. The telco has a total debt liability of about Rs 300 billion currently, the lowest as compared to its private sector rivals. We are trying to overcome 4G challenges, and are going ahead with home-grown technology after the completion of our PoC in Chandigarh. Once 4G service comes in, BSNL will be in a better position in the telecom market.
Second revival package
The government announced a revival package for BSNL worth Rs 1.64 trillion, and approved its merger with BBNL. With these measures, BSNL is expected to turn profitable by 2026-27. This is a realistic approach. Our intent is to increase our customer base in rural areas, from where we get only around Rs 30 billion currently (from our total revenue of around Rs 190 billion). With this, we now have a sustainable growth opportunity.
Network upgradation and 4G roll-out plans
BSNL can launch 4G within six months or by the next financial year after the PoC, as spectrum is no challenge. As part of Phase I deployment 50,000 out of 90,000 sites will be 4G enabled. Meanwhile, Tejas Networks has assured the telco that as an original equipment maker of radio access network, the company will be supplying the equipment locally, although there is no constraint as per the qualifying criteria it mandated at the start of 2022.
BSNL 4G will be available at 125,000 4G mobile sites by May 2024. Moreover, the 4G network gear being purchased by the company will be upgraded to 5G via software updates. The company is working with Tata Consultancy Services and the state-led research and development organisation, Centre for Development of Telematics, to deliver locally developed 4G services. BSNL will also start rolling out its 5G services in India in 2024.
There should be investment in the network for everyone to get good service, and the roll-out should be faster. Unless operators have enough resources, they will not be able to invest in the network. Moreover, unless investments are made in network technology, many people will be unable to take advantage of newer technologies. Telecom operators are well placed to derive revenue from other sources, but we also have to look at the fact that India has the lowest ARPU in the world. We need to balance ARPU levels and drive new investments.