Geared for growth

DESPITE constraints, being a public sector company, BSNL has managed to earn a handsome profit this year [2008] and is slated to go ahead with an aggressive growth plan, says A. Raja, Minister for Communications & Information Technology, in an interview to Frontline. Excerpts:

BSNL showed a marginal decline in profits in 2008 as compared with 2007. What, according to you, has been the financial performance of the company and the telecom sector as a whole?

BSNL earned a profit of Rs.3,009 crore this year [2008]. The decline was because a number of subsidies and benefits, especially ADC [access deficit charge], the reimbursement of licence fee and the USO [universal services obligation fund], had been withdrawn. But despite these pressures, the company earned a profit and is poised for growth, especially on account of GSM equipment, orders for which have been placed, and also owing to an aggressive policy of growth in terms of fixed-line-based services.

The Indian telecom sector is witnessing resurgent growth and is poised to emerge as the fastest growing telecom market in the world with an addition of over eight million subscribers every month. Handsets are being sold at affordable prices, within the reach of the common man, which in turn has made India one of the most sought after telecom-manufacturing destinations.

The total number of telephone connections has gone up from 205 million in March 2007 to 353.61 million in September 2008. [In the same period], overall teledensity increased from 18.22 per cent to 30.64 per cent; and rural teledensity has gone up from 5.9 per cent in March 2007 to 12.89 per cent in September 2008. FDI [foreign direct investment] equity inflow has gone up from $478 million in March 2007 to $1,261 million in March 2008.

What are your major policy achievements?

The government has issued detailed guidelines permitting intra-service area merger of CMTS/UAS [cellular mobile telephone service/unified access service] licences for the proper conduct of telegraph and telecommunication services. This means mergers and acquisitions would take place within the guidelines approved for better and efficient telecom performance.

Approvals to set up centres of excellence were given during the year. Seven such centres have already been set up to give a fillip to research and development in the telecom sector. Approval has also been given for the setting up of a centre for communication security, research and monitoring with a centralised model for lawful telecom interception, monitoring and analysis.

The government has also issued detailed guidelines on the sharing of active and passive infrastructure to different service providers in order to reduce input of telecom access service providers and facilitate further reduction in tariff as well as enhanced teledensity in rural areas.

Besides, during the year, 120 new licences were issued covering 22 circles in the country in order to increase competitiveness and ensure better services to telecom users.

What are the important initiatives in this sector?

Wireless broadband services and 3G services are the most important ones. This would ensure that value-added services like high-resolution video and multimedia services in addition to voice, fax and conventional data services with high data rate transmission capabilities will be available to the public.

Wireless broadband will ensure enhanced penetration of broadband, especially in the rural areas. It will also facilitate taking e-governance services like e-medicine, e-ticketing and e-education to a large rural population.

Auctioning of 3G and broadband spectrum will be done through the Internet, which will enable new players to bid, leading to technological innovation, more competition, faster rollout and ultimately greater choice for customers at competitive tariffs.

Broadband wireless licences would be granted through an e-auction as well which shall be executed by a specialised agency to ensure transparency in the telecom sector.

Mobile number portability is another such initiative. It allows subscribers to retain their numbers when they switch from one service provider to another irrespective of mobile technology or from one technology to another, of the same or any other service provider. The guidelines for the grant of Mobile Number Portability Service Licence in the country were announced by the government on July 1, 2008.

What is the status of the plan for BSNL-ITI (Indian Telephone Industries) merger?

Officers and employees union of ITI have requested the government for a merger with BSNL but the officers and employees union of BSNL have opposed it and given a representation to the government in this regard. As BSNL is a service provider and ITI is a manufacturing unit, various issues have to be examined.

Given the competition in this sector, is there an attempt to keep the workforce in a fit condition?

For maximum utilisation of our staff, redeployment of surplus staff, wherever required, is a continuous process. The option of VRS [Voluntary Retirement Scheme], if required, will be carried out after discussions with all the stakeholders.

What are the expansion plans for BSNL mobile?

Orders for the expansion of the mobile network of BSNL by 25 million lines in various zones have already been placed. Supply of equipment has already started. In order to meet future requirements, tenders for 93 million lines of GSM equipment have been invited. We have an equally ambitious programme for the expansion of BSNL Broadband. We have sought Maharatna status for BSNL.

The matter is being discussed with various stakeholders.