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BSNL has nationwide licences for providing basic, long-distance, mobile and Internet services. - K.V. SRINIVASAN

In six years of its existence, BSNL has overcome many challenges and emerged as a world leader in telecommunications.

BHARAT Sanchar Nigam Limited (BSNL), formed in 2000, is the world's seventh largest telecommunications company. Its profit margins are comparable to and, in some cases, better than India's oil public sector undertakings. The entity provides a wide range of telecom services - wireline, Code Division Multiple Access (CDMA), mobile, Global System for Mobile Communications (GSM), Internet, broadband, carrier services, Voice over Internet Protocol and Intelligent Network services.

The company has taken the lead in providing seamless connectivity across all networks for the benefit of its customers. Also, by providing non-discriminatory interconnection, it enables subscribers of other service providers to communicate with each other. This has resulted in effective competition resulting in high growth and quality services at low tariffs. The present turnover of BSNL is over Rs.35,000 crores ($8 billion) with net profits of nearly Rs. 10,000 crores ($2.2 billion). Its infrastructure assets are worth about Rs.63,000 crores ($14.37 billion). The company is in the process of adding six crore lines and has floated one of the largest global tenders for this purpose.

CellOne, BSNL's cellular service, has a subscriber base of about two crores, which is 24 per cent of all mobile connections in the country although it does not serve two of the highest cell-phone-using metros, Delhi and Mumbai. These two cities and their adjoining areas are served by Mahanagar Telephone Nigam Limited. Cellone covers 4,000-odd cities and is the most extensive network in the country.

In the basic services segment, which is operated in the brand name of Bfone, BSNL is the undisputed leader with 85 per cent of the subscriber base and a 92 per cent share in revenue terms. Although a number of basic lines have been surrendered, improvement of the public grievance system and staff training has helped arrest the surrender rate. The basic services segment is expected to get a fillip with the launch of the broadband services, Dataone. BSNL won the Telecom Asia award in Thailand for its successful transformation from a government company to a public sector enterprise.

The process of transformation began with the government deciding in 1999 to separate the policy-making and licensing functions of the Department of Telecommunications (DoT) from its service provision functions. As a result, the Department of Telecom Services (DTS) was carved out of DoT. As part of the continuing process of opening up the telecom sector, the DTS was bifurcated and the Department of Telecom Operations (DTO) was created in July 2000. The DTS and the DTO were then corporatised into a wholly owned government company, BSNL, in September 2000 and the business of providing telecom services was transferred to the new company in November 2000.

The company was formed with a paid-up capital of Rs.5,000 crores. The authorised capital as on March 2005 was Rs.10,000 crores and the preference share capital was Rs.7,500 crores. BSNL has nation-wide licences for providing basic, long-distance, mobile and Internet services. At the time of its formation, BSNL had a base of 2.38 crore phone lines, which has since increased exponentially. It also has over 25 lakh Internet customers who access the Net through a number of options such as dial-up, leased lines and accountless Internet. BSNL is the country's number one Internet service provider.

The company is organised into 24 territorial circles and 19 non-territorial circles covering the entire country. The territorial circles are further divided into secondary switching areas, which are the basic management units of the company. The non-territorial circles, such as telecom stores, quality assurance, training projects and maintenance, are responsible for specialised activities.

The company is headed by a Chairman and Managing Director who is assisted by a Board of Directors comprising five functional directors looking after finance, planning and network switching, human resource, operations, and commercial and marketing, besides two non-functional directors. The circles are headed by Chief General Managers who are responsible for their day-to-day functions.

The telecom behemoth has met all the main objectives of corporatisation within six years of its formation. The objectives set out by the government were: To accelerate business development in line with recent global trends; to introduce appropriate autonomy and flexibility in decision-making; to introduce a commercial culture with the focus on service to customers; to build infrastructure and accelerate network expansion through increased internal resources and tapping of capital markets; and to meet universal service obligations.

The company's turnover, coverage, reach and comprehensive range of services have resulted in a large consumer base. Aiming to provide high customer satisfaction, BSNL has been paying greater attention to this area by opening more and more customer service centres. In its ongoing endeavour to expand modes of bill payment options, several new arrangements are in an advanced stage of negotiation/finalisation/implementation. Some of these include: recharge of Excel prepaid cards through the automatic teller machines of Punjab National Bank and State Bank of India; expansion of bill payment through Easy Bill retail outlets, now available in Bangalore and Gurgaon and Noida in the National Capital Region, to other cities; and payment through Internet/ECS using the services of intermediaries Bill Desk and Bill Junction respectively, and through credit/debit cards.

The telecom factories (TF) of the company are located in Kolkata, Gopalpur, Kharagpur, Jabalpur, Richhai, Bhilai and Mumbai. They are engaged in the production of pay phones, mini pillars, CT boxes, DP boxes, Line Jack units, towers and SS drop wire, optical fibre coil accessories and FDMS, among other things. During 2004-05, the total production of the TFs was worth Rs.169.47 crores. In physical terms, the supply of DP boxes, LJU, drop wire, towers, joint closure and so on was significantly higher than in 2003-04. The TFs supplied 1,502 towers, the highest number ever during 2004-05. The Kolkata and Jabalpur TFs are expected to start production of jointing kits during the current financial year. The foundry unit of the Kharagpur TF was decommissioned in July 2004 in view of the lack of demand for foundry products. With a view to using the factories' infrastructure and workforce gainfully, efforts are being made to tie up with other technology providers.

The company recognises that its employees are its most valuable assets. Its continued effort to reduce the staff-telephone ratio in order to improve productivity have shown significant improvement. During the year under review, the perks to non-executive employees, which included incentives for working in rural/unclassified areas, transport allowance and supplementary diet allowance, were revised in accordance with the wage agreement.

The company has entered into an agreement with the Life Insurance Corporation of India to provide all its employees coverage under a group savings-linked life insurance scheme. The group insurance policy includes a life insurance component, which provides cover against natural death and double accident benefit in case of accidental death where the claimant will get twice the sum insured. The scheme has become operational since August 1, 2005. Employees are given incentives for working in inhospitable and insurgency-prone areas.

Industrial relations in BSNL have in general remained cordial. For the grant of recognition to a majority-representative union of non-executive employees, elections were held for membership verification. The BSNL Employees Union emerged as the majority representative union in December 2004.

The company has 45 telecom training centres comprising three apex level training centres - the Advanced Level Telecom Training Centre in Ghaziabad, the Bharat Ratna Bhim Rao Ambedkar Institute of Telecom Training in Jabalpur, and the National Academy of Telecom Finance and Management in Hyderabad - and the rest spread across the country. During 2004-05, induction and in-service training was given to 62,925 employees. In all 46,639 Group C employees were given behavioural and attitudinal training and 110 employees were trained by an external agency within India. BSNL also offers overseas training programmes to its employees in areas such as International Telecom Union (ITU) study group meetings; business visits; and paid and fellowship training, including technology training.

The company is aware of its social responsibility. Communication networks in Tamil Nadu, Kerala and the Andaman and Nicobar Islands were restored within the shortest possible time.

The evolution of the elaborate corporate structure of BSNL is in contrast to the slow and unsure start of Post and Telegraph in India. Initially the P&T Department was accommodated in a small part of the Public Works Department and the pioneer of telegraph and telephone in India, William O'Shaughnessy, was not confident if the experiment would succeed. He preferred to stay with his parent cadre, the PWD, all through his service life. A separate department was opened around 1854 when telegraph facilities were thrown open to the public and this department for the first three years comprised a Superintendent of Telegraphs assisted by three Deputy Superintendents at Bombay, Madras and Pegu (Burma) besides a handful of inspectors. O'Shaughnessy became the first Superintendent of Electric Telegraphs in India and later became its first Director-General.

The Indo-European Telegraph Department, which later came to be known as Overseas Communications, was administered by a Director-in-Chief whose headquarters was in London. On February 15, 1888, the post was merged with that of the Director-General of the Indian Telegraph Department. Since then, the history of the P&T Department has been punctuated by organisational changes, of which the formation of BSNL is the latest.

On the eve of First World War, in 1914, the next big administrative change came. The Postal Department and the Telegraph Department were amalgamated under a single Director-General. This department began evoking a great deal of interest among law-makers.

The next major reorganisation of the department took place in 1925. The accounts of the P&T were reconstituted to examine the true fiscal profile of the department. The attempt was to find out the extent to which the department was imposing a burden on the taxpayers or bringing in revenue to the exchequer. In 1931, numerous economy measures were introduced as this department could not remain immune to the effects of the Great Depression. From the beginning, the P&T set up was run on welfare lines. Profit was not the motto during the first 120 years of its existence. This was a far cry from the motto of commercial operations in all spheres, although this cliche was to dog its operations from its middle years.

For instance, the annual report of the department for 1931 said: "It is the accepted policy of the government that the department should be so administered that there should be neither any substantial profit nor any substantial loss on its working under normal conditions. As has already been indicated, the achievement of this ideal has not proved possible owing mainly to the exceptional economic and trade conditions of recent years. One of the main contributory causes was the revision and improvement of pay of the great bulk of the employees of the department in recent years. This was undertaken with the approval of and indeed under pressure by the Legislative Assembly. While the department is commonly spoken of as a `commercial' one and though as far as possible it is guided by the commercial considerations in the regulation of its business, it must be realised that in many directions it is debarred from observing strict business principles. Many of the purposes which it is required to serve are unremunerative and notably, in matters relating to the employment and control of staff, the department is bound by a large volume of statutory and other rules, doubtless necessary for the regulation of a public service, but which in the aggregate involve many restrictions of a kind unknown to private commercial concerns."

After the implementation of the Federal Financial Integration Scheme of April 1, 1950, the administration of the entire network of telegraph and telephone systems of the nation, including those that existed in the former princely states, became a major adventure. In 1950, the number of telephone exchanges absorbed from the princely states was 196. These systems, which were working with different degrees of efficiency, could fit into the general telecommunications network. The installed capacity of these exchanges was 13,362 lines with 11,296 working connections.

Soon after the absorption, an attempt was made to improve their technical efficiency by replacing obsolete and unserviceable equipment and lending well-qualified and experienced staff. Simultaneously, isolated exchanges were integrated with the general pool. The more complicated task was the acquisition of the staff. Their final absorption into the different cadre of service in the P&T was a major step.

Until December 31, 1984, the postal, telegraph and telephone services were managed by the P&T Department. In January 1985, two separate departments for Posts and the Telecommunications were created. The accounts of the departments were also separated. With the takeover of the accounts from the audit, and the delegation of larger financial powers to the field units, internal financial advisers were posted at all the circles and units.

The Telecom Commission was constituted in 1989. It has the DoT Secretary as its Chairman and Member (Services), Member (Technology) and Member (Finance) as full-time members. Secretary (Finance), Secretary (Information and Technology), Secretary (Industries) and Secretary (Planning Commission) are part-time members of the Commission. In 1986, DoT reorganised the telecommunication circles with the Secondary Switching Areas as basic units.

This measure was implemented in a phased manner. Bombay and Delhi Telephones were separated to create Mahanagar Telephone Nigam Limited. On October 1, 2000, BSNL was created as a public sector unit.

Since then, BSNL has had to grapple with several challenges. These related not only to technology but to consumer preferences. The dominance of fixed-line phones has ended and mobile phones today occupy a greater market share than fixed-line phones. From being an organisation that spent the last two decades wiping out the waiting list for fixed-line phones, BSNL today has to revise its policy to clear the waiting list of prepaid cellular connections.

Facing severe competition, BSNL evolved several customer friendly measures such as clearing the waiting list on a day-to-day basis, that is on a single day in one shot.

It has launched audio and videoconferencing services across the country. Videoconferencing service is being launched in 94 cities and audio conferencing will be available in the entire service area of BSNL. Wherever videoconferencing is available, there will be a studio facility where the general public can avail itself of the service. Both the services will be available to existing BSNL subscribers only. The videoconferencing service was initiated to tap the business end of the telecom market, an area that has become competitive. It allows multiple participants to converse with each other regardless of their location through video end-points or personal computers.

The service involves audio and video communication. A videoconference subscriber can add one or more participant on demand or by scheduling through the Web. Any user can avail himself/herself of the videoconferencing service through Internet Protocol or Integrated Services Digital Network interface.

The company has embarked on the largest ever roll-out of cellular service ever undertaken. Over the next three years, it will provide cellular services on demand in virtually every part of the country. BSNL has broken all its past record by adding 10 lakh cellular connections in the last month of 2005. It has achieved a landmark of more than 14 million mobile connections all over the country. More than 4.77 lakh connections have been provided in the South Zone, which comprise more than two lakh connections in Kerala, 1.25 lakh in Tamil Nadu and 75,000 each in Andhra Pradesh and Karnataka. The waiting list for cellular connections in the South Zone has been cleared and connections are now available on demand. In the North Zone, 2.58 lakh connections were released in December 2005. More than 1.2 lakh connections have been provided in Uttar Pradesh and around one lakh in Rajasthan.

In the North Zone, mobile connections are available on demand. BSNL's market share in Jammu and Kashmir is to the extent of 65 per cent. In the East Zone, 2.68 lakh connections have been provided, of which one lakh connections have been given in West Bengal and 62,000 in Bihar. In the northeastern States, BSNL's market share is about 70 per cent.