Connecting India

A customer service centre of BSNL in Madurai, Tamil Nadu.-G. MOORTHY

STARTED in October 2000, with the vision of becoming the largest telecom service provider in Asia, Bharat Sanchar Nigam Limited is the worlds seventh largest telecommunications company. It provides a comprehensive range of services in India, which include wireline connections, CDMA (code division multiple access) mobile, GSM (global system for mobile communications) lines, Internet, broadband, MPLS-VPN (multi protocol label switching-virtual private network), VSAT (very small aperture terminal) and VoIP (voice over Internet protocol). Within this short span of time, it has also become one of the largest public sector companies in India.

BSNL has established a high-quality telecom network in the country and is now focussing on improving and expanding it by introducing services with information and communication technology applications in villages. The companys unique selling proposition of connecting India is illustrated by its huge reach across the country.

Today, it has 361.30 lakh working fixed telephone connections, with plans to add 111.50 lakh connections in 2009. The company has 362.09 lakh cellular mobile connections. With this, the number of BSNLs working connections has reached a whopping 723.39 lakhs as against the total installed capacity of 860.56 lakhs.

The company also has 20.32 lakh working broadband connections as against the installed capacity of 34.68 lakhs, and 35.62 lakh Internet connections as against the installed capacity of 38.28 lakhs. It plans to add 15 lakh broadband and five lakh Internet connections in 2008-09.

BSNL has been adjudged as the number one Internet service provider in the country.

BSNL is the only service provider that is making a focussed effort to bridge the rural-urban digital divide with its wide network that is providing services to every nook and corner of the country except Delhi and Mumbai (these two cities are served by MSNL). No other telecom operator in the country can beat its reach.

As many as 5.19 lakh village public telephones out of the total 20.51 lakh public telephones in the country are BSNLs. Whether it is the Siachen glacier or the north-eastern region, BSNL serves its customers with a wide bouquet of telecom services. Its massive reach can be understood by the fact that the company offers wide-ranging and transparent tariff schemes designed to suit different categories of customers. About 24 per cent of mobile phone users subscribe to BSNLs CellOne. This means that every fourth mobile user in the country has a BSNL connection. In basic services, BSNL is miles ahead of its rivals, with 36.1 million subscribers. This constitutes 85 per cent share of the subscriber base and a 92 per cent share in revenue.

BSNL has set up a world-class multi-gigabit, multi-protocol, convergent IP infrastructure that provides services such as voice, data and video through the same backbone and broadband access network. The company has vast experience in planning, installation, integration and maintenance of switching and transmission networks.

BSNL earned a revenue of Rs.38,053.40 crore in the fiscal year 2007-08, and its profit after tax was a huge Rs.3,009.39 crore. Though stiff competition in the market caused a decline in its income and profit, the company, did not resort to any predatory or hidden-tariff techniques.

The companys success story is reflected in its massive growth in the cellular sector; it has grown by about 88 per cent despite want of capacity. Capacity utilisation in this sector has been an incredible 113 per cent. BSNLs GSM cellular service has a presence in over 600 district headquarters in the country.

BSNLs aim is to provide quality and reliable fixed telecom services, thereby increasing customer confidence; provide mobile telephone service of high quality and become the number one GSM operator in its area of operation; provide point of interconnection to other service providers as per their requirements; facilitate research and development in the country; contribute to the national plan target of a 500-million subscriber base by 2010; and create a broadband customer base of 20 million by 2010 as per the Broadband Policy, 2004.

Rural telephony has been an area of importance for BSNL despite low remuneration in the segment. The company entered into an agreement with the universal service obligation fund to provide public telephones in 66,822 villages, each with a population of more than 100 people as per the 1991 Census. As many as 54,167 public telephones were provided to such villages as on March 31, 2008. Readying the villages forms a significant component of the Government of Indias Bharat Nirman programme.

BSNL has also replaced 180,735 village public telephones, which were working on multi-access radio relay technology, with digital telephones. Providing rural communities with telephones is a thrust area for BSNL. Every village with a population of more than 2,000 people, as per the 1991 Census, is provided with community telephones. As on March 2008, BSNL provided over 21,914 such telephones to rural communities. Similarly, the company has also provided 12.36 lakh direct exchange lines in rural areas.

BSNL offers Internet service with a speed range of 2 Mbps to 8 Mbps across 3,200 towns and cities. Out of the 612 district headquarters in the country, 585 have broadband connectivity. As many as 25,000 villages have broadband connections, and by March 2009, one lakh more villages are expected to be covered. The companys broadband expansion plan aims at covering all gram panchayats, government higher secondary schools and public health centres as part of its e-governance project.

For the benefit of its customers, the company offers a number of value-added services such as television on mobile, radio on mobile, railway PNR status enquiry through interactive voice response, Collect SMS, multilingual SMS and railway-ticket booking through general packet radio service (GPRS).

In addition, a host of value-added services are offered though the broadband platform. These include dial VPN, which allows remote users to access their private network securely over the BSNLs National Internet Backbone II infrastructure, VPN on broadband, Internet Protocol Television (IPTV) with video-on-demand services, which provides broadcast quality television and video signals. This service is now available in Pune, Bangalore and Kolkata.

The company is planning to offer more value-added services like tele-education, mobile advertisements, SMS notifications to pre-registered friends and family members of customers, lost-mobile tracking, mobile commerce, subscription-based security service for personal computers, push e-mail, video tutoring and video surveillance. The company is also planning to offer total telecom solutions to large corporate houses using mobile technology as part of enterprise business development.

Thus, while the company continues to provide efficient services to its low-income mainstream customers, it has also taken care to cover high-end users with its services, in order to provide a stable source of revenue.

Growth in the telecom sector, especially in the cellular segment, can be an important factor in the countrys growth as an economic superpower. Realising this, BSNL plans to procure 93 million lines of GSM equipment to meet capacity requirements beyond March 2009.

Its expansion plans aim to connect all villages with a population of more than 1,000 people, introduce 3G technology to enable high-speed data-transfer applications, introduce new value-added services such as mobile TV, mobile broadband and MMS, using new technology networks; and provide end-to-end telecom solutions using mobile technology.

Being a state-owned entity, BSNL is active in community and social development efforts. Some of the activities envisaged under the companys corporate social responsibility policy are adoption and rehabilitation of select villages and blocks in times of natural calamities and restoration of their infrastructure; donation of ambulances to government hospitals; provision of PCs with broadband connections to schools for the physically handicapped and mentally retarded children and orphanages; provision of GSM public payphones on tricycles and wireless in local loop (WLL) data connections along with point-of-sale terminals to physically handicapped persons to enable them to issue railway and air tickets; and sponsoring major sports and cultural events.

In a competitive environment, where attracting and retaining talented, trained and experienced manpower has become a major challenge, BSNL has embarked on a string of initiatives, which has contributed to the creation of a committed workforce.

A structured system of performance appraisal, which is done on a balanced business scorecard, besides a cluster of employee welfare measures are at the root of BSNLs success as a company. The company has training programmes to upgrade skills of employees across grades and functions through a combination of classroom sessions and external programmes, both domestic and international.

The companys human resource structure is geared to meet the complexities and challenges that are likely to arise in the telecom sector. The company provides effective support to its business teams so that they deliver value to customers and stakeholders.

Sixty-one officers were sent abroad for technological training in 2007-08, and 100 officers participated in international exhibitions, meetings and conferences with a view to learning the latest developments in the telecom sector. The company also deputed 20 officers at the vendors premises for testing and validation of equipment supplied by them. BSNL has entered into an agreement with the Indian Institute of Management Ahmedabad to conduct development programmes for its officers.

The company has signed a tripartite agreement with the Indian Institute of Technology Kanpur and the Department of Telecommunications for setting up a telecom centre of excellence at IIT Kanpur.

BSNLs biggest challenge is to compete with private operators and retain its market share without resorting to purely commercial practices in its business model. It also has to shoulder the responsibility of providing telecom facilities in rural and remote areas, which are less remunerative and affect its profitability.

The Telecommunications Regulatory Authority of Indias decision to abolish access deficit charges with effect from April 1, 2008, has caused a substantial revenue loss to the company approximately Rs.2,000 crore in 2008. The increase in the number of licences issued in the telecom sector will make competition stiffer. All these have started affecting the companys profit margins, which registered an almost 50 per cent decline from Rs.7,805.87 crore in 2007 to Rs.3,009.39 crore in 2008. While the income has shown a decline, the companys expenditure has increased, mainly owing to the conversion of a portion of the dearness allowance equal to 50 per cent of basic pay as dearness pay with effect from January 1, 2007, which has enhanced employee remuneration.

Other factors responsible for increase in expenditure are the increase in interconnect usage charges of other operators and change in the depreciation rate owing to downward revision of economic life of subscribers installations to five years.

All this has put the companys finances under a strain. In order to keep its market share, maintain profitability and remain afloat, the company has to adopt innovative techniques.