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Interview with R.K. Upadhyay, Chairman and Managing Director, BSNL

February 03, 2014
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In an interview with tele.net, R.K. Upadhyay, chairman and managing director (CMD), Bharat Sanchar Nigam Limited (BSNL), outlines his key priorities – retaining the company’s market share and increasing its presence in the broadband, mobile and value-added service (VAS) segments. Realising that tough times call for tough measures, Upadhyay is pulling out all the stops to revive the fortunes of the state-run company, which was once a serious contender for the top spot in the country’s wireless market.

Excerpts…

What were the company’s key milestones in the past year?

BSNL marked a number of milestones during the past year. The most notable ones are:

•The company increased its market share from 62 per cent to 65 per cent and retained its leadership position in the broadband segment.

•The growth attained by BSNL in the mobile segment was amongst the highest in the country.

•The negative trend in BSNL’s fixed line operations has been stemmed and this business is expected to receive a fillip with an increasing number of subscribers in the youth segment opting for fixed line connections.

•BSNL has been able to reverse the trend of falling revenues.

•During the past few years, BSNL attempted to float a tender for the procurement of GSM lines, which was cancelled at various stages, based on the recommendations of various authorities. The company has reinitiated the tendering process for all circles in the west zone while network expansion is under way in most circles in the north, south and east zones. A tender for 15 million GSM lines has been finalised, the purchase order has been placed for most circles and project roll-out is under way.

What trends do you foresee in 2014?

The Indian telecom market is one of the fastest growing ones in the world. Mobile services are now available in every nook and corner of the country, the voice market is stable, and data services are picking up and being adopted at a slow pace. Currently, about 100 million Indians are using the internet.

Going forward, telecom operators are expected to focus on internet services to compensate for the stagnating voice market. New value-added services (VAS) based on social networking, banking, security, health and commerce are expected to be adopted, which will provide an additional source of income to telecom operators.

What is your view on the current policy and regulatory environment? How has it impacted investor confidence?

Over the past few years, the telecom sector has undergone major changes. State-owned operators were privatised and effective regulations were introduced. This was aimed at creating an environment that boosts public confidence and ensures stability, transparency, competition, investments, innovation and growth in the sector.

So far, effective regulations have resulted in several benefits such as economic, technological and investment growth; improved quality of service (QoS); low prices; and high service penetration. Regulations should be periodically reviewed and phased out when not required.

What has been the response to BSNL’s data services? What initiatives have been taken to encourage 3G service adoption?

The response to BSNL’s 3G SIM and data cards has been satisfactory. BSNL was the first operator to introduce 3G mobile services in its area of operations. We started by launching a plan that offered 3G voice services bundled with video calling and full audio streaming. Currently, our 3G services are available in over 1,700 cities and towns.

Going forward, we plan to enhance the reach of these services and bundle them with government-promoted programmes aimed at benefiting the consumer. We are planning to introduce several relevant value-added services in various regional languages.

What are the key steps being taken by the company to revive its profitability?

The company’s revenues have improved steadily over the past year, driven by steady growth and customer retention. Nevertheless, we have prepared plans to tap other revenue sources as well. We intend to utilise spare infrastructure like bandwidth, land, buildings, telecom factories and towers, and introduce new services like Wi-Fi, m-banking and m-commerce to add customers and for additional revenue.

How was the company’s financial performance during 2012-13 and how is it likely to change in 2013-14?

BSNL’s financial performance since 2008 has not been satisfactory. The key reasons for the dismal performance have been delays in tender finalisation and procurement processes; vigilance-related complaints; etc. Due to these issues, BSNL could not buy any new GSM network in the past few years while the utilisation of existing networks also remained poor. During 2012-13, we reduced our expenditure and improved our QoS through effective monitoring and cut revenue losses as compared to the preceding years. We hope that BSNL returns to its past glory in the coming years with the implementation of current and planned initiatives.

To what extent has the company been able to leverage its optic fibre network? What are its plans for this segment?

Optic fibre is capable of providing high data rates over long distances and is a superior technology option from the quality perspective. The country’s current telecom network has low fibre penetration on the access side. Currently, only 0.52 per cent of broadband connections are based on optic fibre. BSNL has about 725,000 km of optic fibre networks across the country. The National Telecom Policy, 2012, with its broadband-on-demand vision, is expected to provide a major fillip to broadband penetration and growth.

However, the current fibre coverage is limited to metros and other major cities. Most of the gram panchayats and villages have not been covered yet. The National Optical Fibre Network (NOFN) project under the special purpose vehicle, Bharat Broadband Network Limited, has opened up new opportunities in optic fibre development. The NOFN will ensure that a broadband network offering speeds of at least 100 Mbps is available at the gram panchayat level. E-health, e-education, e-governance and e-commerce applications and videoconferencing facilities can be provided through this network.

What initiatives are being taken to improve service delivery and rural reach?

BSNL has the most extensive rural telecom coverage in the country. We offer fixed line services in more than 550,000 villages, CDMA services in more than 420,000 villages, 2G/3G services in more than 375,000 villages and broadband services in about 170,000 villages. BSNL aims to provide the latest telecom services to the rural population at the most affordable tariffs. Several mobile value-added services are planned, which are targeted at rural people.

What are the key challenges facing BSNL? What measures are being taken to overcome them?

In 2013, BSNL faced severe capacity issues in the mobile and broadband segments. Fixed line technology has largely become outdated. We have procured additional capacity for both mobile and broadband networks and now there are no capacity constraints in BSNL’s network. We are also upgrading the fixed line network to an IP-based one, which will provide both fixed line and broadband services.

What are the company’s growth and investment plans for 2014?

The company wants to focus on the following areas:

•Retaining its current market share for the next five years

•Replacing legacy time division multiplex-based switching technology with a state-of-the-art next-generation network (NGN) with a focus on fixed mobile convergence

•Upgrading the Centre for Development of Telematics’ MAX switching network to NGN with a thrust on providing managed hosting and cloud computing services through intranet data services

•Expanding its GSM network with a focus on data services.

 

 
 
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