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Interview with Anupam Shrivastava, Chairman and Managing Director, BSNL

November 09, 2015
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Bharat Sanchar Nigam Limited (BSNL) is taking several initiatives to improve its operational and financial performance, with a primary focus on data services. In an interview with tele.net, Anupam Shrivastava, chairman and managing director, BSNL, talks about the company’s recent initiatives, its key strategies and future plans. Excerpts:

How has BSNL’s performance been in the past one year? Could you highlight some of the initiatives taken by the company across its business segments?

BSNL has already begun on its revival path. In the past year, many new initiatives have been taken in the landline, mobile, enterprise and broadband businesses, and these have started bearing fruit. For instance, in the landline business, the company has started the free night calling scheme  wherein customers can make calls from their BSNL landlines to any network in the country at absolutely no cost. This has generated interest among subscribers, which is evident from the growth in traffic on the wireline network and the slowdown in the rate of landline disconnections. In fact, the company expects the net additional wireline users to become positive soon.

As far as the mobile segment is concerned, BSNL is the only operator to launch the free all-India roaming scheme. Customers can avail of this scheme and roam across the country on BSNL’s network without having to pay any extra charges. This has doubled the number of our mobile connections. In July, August and September 2015, we added more than 450,000 mobile connections. Moreover, mobile number portability has for the first time proved to be positive for BSNL. Owing to the increase in subscriber base, revenues have also started increasing, which will to some extent offset the losses incurred due to the provisioning of free roaming services. With regard to the broadband business, effective October 2015, our landline broadband services have a minimum speed of 2 Mbps.

What are some of the initiatives taken by BSNL for its enterprise business?

We have strengthened our core network to make it more data centric. We have also approached various prospective clients, mostly banks, and suggested that they upgrade their network to 2 Mbps. Several banks have come forward in a big way to use BSNL’s network and this has given a boost to the enterprise segment. During the April-June 2015 quarter, income from the enterprise segment increased tremendously. At present, the enterprise segment accounts for 10 per cent of BSNL’s revenues and we expect this to reach 18-20 per cent over the next three years.

What are your views on the recently approved spectrum trading and sharing guidelines? Does BSNL intend to enter into sharing agreements with other players?

BSNL holds some spectrum that has been obtained through the administrative route, though the remaining spectrum has been obtained at market-determined prices. We will definitely choose to share the latter spectrum with other operators; in fact, we are already in discussions with various operators. So far, we have not thought much about the trading guidelines because BSNL is a government entity. For trading any part of the government’s assets, we will have to hold discussions with the ministry first and only then can we decide.

The industry is witnessing significant call drops. What is the primary reason for this sudden increase in call drops?

The industry is witnessing a major increase in call drops. One of the major reasons for this is the myth behind the setting up of telecom towers. Resident welfare associations are not permitting the installation of towers on their premises fearing health hazards. However, these health problems have not been proven. Even the World Health Organization does not have any evidence to support this. In fact, our radiation emission standards are one-tenth of those in other countries.

Further, municipal bodies are asking operators to shut down their existing tower sites. As a result, the network is fragmented in these areas, which results in artificial traffic to the extent that calls drop. Moreover, if an operator has poor network quality in a particular area, it will not only affect its own network but also other operators’ networks because they are interlinked.

What are the short-term measures that can be taken to address the call drop issue, apart from setting up more tower sites?

While the larger question of network expansion and spreading education of the municipal bodies and people regarding the health risks associated with tower sites can be addressed in the long term, the immediate solution for operators is to focus on the quality of the existing network. They should start optimising their existing networks, conduct drive tests and make their networks more efficient so that the situ-ation of call drops improves. Over time, they can set up more towers under a long-term strategy.

How has the uptake of data services been for BSNL in the past one year?

The uptake of data services has been phenomenal. While the data services business has been expanding at the rate of 65-70 per cent per annum, data traffic on the network is growing at the rate of 70 per cent. Two years ago, BSNL used to carry around 80 TB of data traffic on its network per day. This has now increased to 240-250 TB per day. On account of this tremendous growth in data traffic, BSNL is investing more on expanding its 3G network, which currently comprises 35,000-36,000 sites across the country.

What has been the impact of the increased usage of over-the-top (OTT) applications on BSNL’s mobile services?

There has definitely been a drop in the number of person-to-person (P2P) SMSs carried through the network. However, this has been compensated by a substantial increase in the advertisement-to-person SMSs. Meanwhile, P2P messages are being sent through OTT applications, thereby resulting in growth in data traffic. There has not been much impact on the voice service business, as only the international voice business has been affected. The domestic minutes of usage have not witnessed much of a decline.

What has been the impact of the downward revision in interconnection usage charges (IUC) on BSNL’s revenue?

The net impact of the revised IUC has been positive for BSNL. In the first quarter, the company’s revenue increased by Rs 2 billion as a result of IUC implementation.

What are your 4G service plans?

BSNL has some spectrum that has been obtained through the auction route. The company is currently conducting trials using this spectrum and intends to launch 4G services in select areas initially. The main strategy for 4G services will be based on the Wi-Fi route rather than the traditional long term evolution (LTE) technology route. Wi-Fi will be BSNL’s main strength because it is the biggest landline operator in terms of the optical fibre cable (OFC) network in the country.

Therefore, the company would like to utilise these resources and deploy many Wi-Fi hotspots, which will be merged with our mobile networks to provide seamless transition. Having said that, BSNL is also working on the traditional 4G service model based on the LTE route, using spectrum in the 2500 MHz band that we obtained through auctions.

What progress has been made on the BharatNet project?

BSNL was executing the National Optical Fibre Network project, which has now been renamed BharatNet. The company has so far connected 30,000 gram panchayats with pipes and 22,000 gram panchayats have witnessed OFC deployment. This shows that the project is being implemented at a good pace.

What are the challenges being faced in the execution of the BharatNet project?

Right-of-way issues were resolved quite early owing to cooperation from state governments and other agencies. However, there was an issue regarding the availability of PLB pipes for the project. As a result, BSNL started manufacturing these pipes at its own facilities. Almost all the issues have now been resolved and the company is ready to move ahead in full swing.

What role can BSNL play in the government’s Digital India initiative?

BSNL can play a very big role in the government’s Digital India initiative. The company is not only extending optical fibre to gram panchayats but is also setting up Wi-Fi hotspots in every nook and corner of the country. It has set a target to install around 2,500 Wi-Fi hotspots in 2015 and 40,000 hotspots in the next two to three years.

What progress has been made on the proposed merger between BSNL and Mahanagar Telephone Nigam Limited (MTNL)?

The BSNL and MTNL merger will be beneficial for both companies since they have synergy in their mobile and enterprise businesses. However, the merger is still at the discussion stage and there are a few issues that need to be resolved. One issue pertains to MTNL’s debt, which has already crossed Rs 160 billion-Rs 170 billion. Another issue is that MTNL is a listed company while BSNL is an unlisted company. There are also human resource-related issues. Employees working in the same capacity have different salary structures and the promotion pol-icies are also different.

What are BSNL’s future plans?

BSNL has earmarked a capex of around Rs 70 billion for 2016. The company will invest about Rs 390 billion over the next five years. It has set a target to improve its top line from Rs 280 billion at present to Rs 420 billion by 2018-19, so that it can make good the expenses that arise from depreciation, as the company is financially positive at the operational level. This level of revenue will result in a profit of Rs 3 billion-Rs 4 billion per annum.

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