Bharat Sanchar Nigam Limited (BSNL) has been a key player in the Indian telecom industry. The state-run operator, which has been instrumental in scaling up rural connectivity in the country, has been involved in the execution of key government projects such as BharatNet and Network for Spectrum (NFS). However, the past few years have been challenging for BSNL, as the operator’s financial health has deteriorated on account of several factors. It is struggling to compete with private players. Moreover, the lack of 4G spectrum has limited its scope in the high speed service space. While there has been much debate and speculation on whether BSNL can turn the tide in its favour, the government is committed to reviving the telco’s financial health as well as its market position. To this end, the Prime Minister’s Office recently approved a proposal to grant 4G spectrum to BSNL. The proposal to monetise BSNL’s land assets and telecom infrastructure has also been approved. The move could prove to be a game changer for the ailing telco. On its part, BSNL is working on improving its business as well as financial position. It has disbursed payments to partners under the NFS and BharatNet Phase I projects, and remains committed to clear payments of other partners as well. At a recent event organised by the Cellular Mobile Association of India and Telecom Equipment Manufacturers Association of India, P. K. Purwar, chairman and managing director, BSNL, shared his views on the current state of the telecom industry, the key challenges faced by the company and the roadmap for its revival. Excerpts…
Current trends
We have come a long way in the past seven to eight years, having transitioned from 3G to 4G. And now as we inch towards 5G, the Indian telecom sector is expected to witness a massive revolution.
We have progressed from offering plain vanilla telecom services to a diverse set of services. Earlier, the telecom industry was focused on connecting people, but now we are offering infotainment services and are steadily moving to connect and interconnect devices.
Industry stakeholders and telecom service providers have played a key role in driving this revolution. However, they are currently facing strong headwinds due to the emergence of a new ecosystem. As a telecom service provider, we have found that the cost of providing a service and the market realisation of providing that service is not in harmony. This means that all telecom service providers operating in the market are going through a rough patch.
Telecom service providers earn revenue from customers and invest that revenue in new technology and equipment. The financial difficulties faced by them impact all stakeholders across the entire value chain. The telecom sector’s current financial situation has impacted all stakeholders. While some organisations have been impacted in a small way, the effect has been much larger on several others.
BSNL’s situation
We are happy to share that the company has been getting ample support from the government. In a major decision, the government is in the process of granting 4G spectrum to BSNL for launching high-speed broadband services. We are expecting a formal communication on the decision soon. This is a positive development as it will not only help us improve our competitiveness in the market, but will also push BSNL to become a strong organisation.
The market should be competitive and no organisation should be averse to the idea of competition. It is important to keep the entire ecosystem healthy, else it will hamper the growth of other participants as well.
When a big player like BSNL faces financial difficulties, it impacts all players in the ecosystem. This is primarily for two reasons. First, since our ability to invest has shrunk, our equipment purchases from local manufacturers have reduced. I feel it is important to focus on and support indigenous technologies, as this would help telecom service providers in harnessing the local manufacturing knowledge and expertise of equipment manufacturers to improve customer service. Second, we have not been able to clear the dues of our vendors, partners and service providers in a timely manner. This has been a very challenging and agonising time for us at BSNL.
Roadmap for revival
BSNL is committed to making full payment to every single person who has partnered with it. I appreciate the support that each partner has extended to us in this difficult time. I would like to request our partners to continue their support for some more time, as I feel that the challenges we are facing today may be overcome to a certain degree as some ideas, initiatives and plans, which are under active discussion of the government, come into effect. With the support of the government and industry, we will be able to overcome the challenges and emerge stronger.
BSNL as an organisation has taken many notable initiatives in the past. We believe that the challenges we are facing today are giving us new opportunities. First, we never thought that our assets could be monetised and be made revenue earning because we always thought that telecom service provisioning was the only way to generate revenues. Today, whatever assets we have, whether it is land, building, fibre or towers, are important and need to be leveraged for revenue generation.
Second, we are looking at changing our thought process in areas where our cost is not competitive. I firmly believe that no support from an external party can make you strong enough to sustain in the market, unless you offer a better product at a competitive price. The current thought process at BSNL is to look at our cost parameters, rationalise our cost structure and provide a competitive range of products to our customers, and, in the process, become competitive in the market. Unless we strengthen our position in the market, any kind of external support will not sustain us in the long run. We are constantly working to strengthen the organisation internally and become more cost conscious. We are seeking every single opportunity wherever possible to not only provide better services to our customers but also to become a brand and a strengthened value provider to customers.
BSNL is conscious of its responsibility both in terms of cost and revenue towards its customers and stakeholders, including its partners. We have to work together to help “Make in India” grow sustainably in the telecom sector.
We would like to explore opportunities in the fields of artificial intelligence and data analytics, and welcome every single idea in these fields. We are open to partnerships where networks can be leveraged smartly for the delivery of services.
Apart from technology and products, our constant focus is on promoting funds flow. So, the long-term strategy for the company’s management is to encourage investments.
In the field of energy management, if the use of a particular type of battery such as lithium-ion is beneficial, then we must adopt it. If a battery type can bring benefits both in terms of longevity of time as well as the total life cycle cost, which we are hoping to reduce substantially, we will be open to exploring the technology.
