`We will be number one'

Interview with K. Sridhara, Chief General Manager, BSNL-Tamilnadu Telecom Circle.

Born in June 1949, K. Sridhara joined the Department of Telecommunications (DoT) in 1971-72. He took over as Chief General Manager, BSNL-Tamilnadu Telecom Circle in April 2004. Earlier, he was the Principal General Manager (Development) in the same circle, when he took a keen interest in the development of the telecom network, both landline and mobile. An officer of the ITS cadre, Sridhara is qualified in a wide range of subjects such as electronics and communications, computers, management, administration, finance, costing and law. He served earlier as Deputy Director-General in the Telecom Engineering Centre as well as in the DoT headquarters in New Delhi. He has also served as Chief General Manager of Assam Telecom Circle. As Project Director of M/s. Tamilnadu Telecom Limited, he was instrumental in setting up a factory for jelly-filled telephone cables at Arakkonam near Chennai. Excerpts from an interview he gave V. Sridhar:

How does Tamilnadu Circle compare with other circles in BSNL's countrywide network?

The quality of service provided by the circle has always been very good, better than those in most other parts of the country. The fault rate, for instance, is among the lowest in the country - less than 2 per 1,000 lines a day. We have covered all the villages in the State with Village Public Telephones (VPT). In the cities and towns, we have been giving connections on demand. And even in rural areas, there is a waiting list only in places where the connection is to be given in remote locations needing local lead of more than 5-10 km. Even here, we are trying to make connections available on demand by using Wireless in Local Loop (WLL) technology. We have already covered about 25-30 Short Distance Charging Areas (SDCA) using CDMA technology, and an equal number using CorDECT technology. During this year, we plan to cover 25-30 SDCAs using CDMA technology. After this, about 60 SDCAs of the 129 SDCAs in the State will need to be covered, latest by the beginning of the next financial year.

With respect to mobile services, the Chennai Circle and the Tamilnadu Telecom Circle were the first, among all State-level BSNL circles, to cross the 8-lakh-subscriber mark. The capacity of the Tamilnadu Circle is now about 6.5 lakh cellular lines, of which 6 lakh connections have already been given.

Is there a danger of the network reaching saturation point in mobile networks?

Definitely. All kinds of problems will crop up. Busy, dropped calls and other problems that characterise a congested network will affect customers. With the existing capacity we can manage fairly well, up to the point we reach a subscriber base of about 7.5 lakhs by properly managing the traffic. But we still need to be very careful. This is the reason why we have to sell the connections in a planned and staggered manner, ensuring that the sales of connections are not concentrated in some pockets of the State. That will result in traffic congestion. We are targeting sales so that we do not face this problem.

Does targeting not mean that you have the potential but are not able to realise it?

We are only trying to fulfil our potential. The network is uneven. In rural areas, for instance, there is less traffic. We are carefully loading traffic, not doing it blindly.

When are you launching the next phase of expansion?

We have already placed orders with Nortel for an additional 8.8 lakh lines. The equipment should come by the end of the financial year or the beginning of the next financial year. When we add this capacity we will be number one in the State; we are currently number two.

Tamil Nadu is relatively a more urbanised state...

Except in a few cities and towns, the revenue per telephone connection is very low. Even in Madurai the average revenue of a connection is very low. It is even lower in Erode. Our experience does not indicate a very high level of urbanisation. Even in the rural segment of areas classified as urban we find that people are not able to afford a telephone. After all, most people still depend on agriculture for a livelihood.

What are the difficulties of building a network in such a situation?

We do not have any difficulty. It is only a problem of low demand for the service. We understand the nature of demand for our services. Accordingly, we can build capacity. For instance, in cellular telephony, we know that demand is pretty high, so, we are doubling our capacity every year. Last year, we had 3.35 lakh connections, this year we are providing close to 7 lakh connections. Next year, although we will provide 15 lakh connections, we know the demand will increase even more. In the case of landlines, the demand is much lower, except in remote locations. We are using new technologies such as CDMA for providing this service.

Has the spectacular growth of mobile communication affected BSNL's landline service?

No, there has been no major impact. Very few people - about 1-2 per cent of our 28.5 lakh subscribers - have surrendered. We find that very few of these subscribers have migrated to other service providers. Most of them have only surrendered their second or third landline connection and have opted for mobile phones, while retaining at least one landline connection. We have a landline capacity of 35 lakh connections.

The growth of cellular telephony has been beyond our expectations. When we launched our service with a capacity of 3.35 lakhs, we were the fourth cellular operator in the circle. We expected that this capacity would last for two years, but the capacity was exhausted within 2-3 months. We learnt soon enough that there is a lot of demand for our service but we could not procure equipment soon because of our limitations as a public sector company. The procedures we have to adopt in tendering equipment results in delays. We have to forecast demand and plan at least one year in advance while ordering equipment. And, in this competitive world, one year is too long a period to forecast accurately. For instance, the latest tender for 8.8 lakh lines was decided a year ago. At that time, we had a capacity of 3.35 lakhs and we did initially think that nearly 9 lakh new lines would be sufficient. But now we realise that 8.8 lakh lines will not last us a year. And, because we have just placed an order, we cannot tender again immediately.

If we did not face this handicap, which is typical of public sector and government-run organisations, we would have overtaken the private operators by now. If we had more flexibility, we could have flooded the circle with mobile phones. Private operators do not face these constraints. They can order equipment immediately. But we also know that this area is very profitable and that we can get returns in less than two years. When we launched our service, in places such as Coimbatore and Madurai, we sold out the connections in no time.

How competitive are BSNL's tariffs?

You ask our subscribers. They come to us after getting their hands burnt by the private operators. The long queues at BSNL counters for cellular services are enough to show how competitive we are. The migration from other service providers to us is very high. Pre-paid subscribers number about 4.75 lakhs and post-paid subscribers number about 1.25 lakhs. The ratio of pre-paid to post-paid is about 4:1.

Is that a good ratio?

A mobile service provider prefers more pre-paid subscribers because the premium on convenience enables the provider to charge a higher tariff. However, the post-paid service is useful to the service provider if he wants to retain the subscribers who may leave them and opt for another service provider. The tariff is lower for these loyal customers. Cellular companies try and strike a balance between the two services by adjusting the tariffs. A pre-paid to post-paid ratio of 70:30 is considered the norm currently.