Print

Comment

Email

Digg

Del.icio.us

Reddit

The fiscal year 2004-05 saw mixed results for BSNL. Driven by a surge in adoption of mobile phones and a more aggressive competition, its fixed subscriber base continued to dwindle. However, despite fierce competition from the more aggressive private operators and its own inherent limitations of being a government-owned organization, BSNL gave its rivals a run for their money in the fast growing mobile services business.

It is now for Bharti and Reliance to watch that despite a pretty low-profile marketing strategy in place, BSNL's subscriber base is getting closer to theirs.

In 2004-05, BSNL's mobile business grew much faster than, that of Bharti and Reliance, the top two mobile operators. Today, BSNL is the country's third largest mobile service operator in terms of subscribers and fourth in terms of revenue. During the year under review, BSNL's mobile subscriber base (GSM and CDMA) grew by 65 per cent to touch 10.16 million, its mobile service revenue jumped 86 percent to Rs 3700 crore. This is around 10 per cent of BSNL's total revenue for 2004-05. In 2003-04, 6 per cent of BSNL's revenue had come from mobile services. Its ARPU is pretty low and this could be a cause of concern for the company.

BSNL launched its broadband services in January 2005. Since then it has attracted 60,000 customers in 60 cities. The operator is betting big on broadband and has set an ambitious target for itself on this front. While it is aiming at rolling out one million broadband connections covering 198 cities by December 2005, it's eying around 6 million broadband customers by the end of 2007.

BSNL is India's largest telecom operator both in terms of subscribers and revenues. It is four times bigger than the second largest operator, Bharti. Its size is more on account of obvious historical reasons. However, looking at BSNL's future plans, it appears that the state-owned operator is unlikely to let its empire shrink so easily.

The firm has chalked out an ambitious plan for the coming years. For instance, BSNL plans to release 15 crore telephone lines in the next three years. From next year (FY 2005-06) onwards, BSNL intends to give 22 million lines per year, as compared to 60-65 lakhs per year, at present. BSNL at present incurs capital expenditure of Rs 10,000 crore every year that will be increased to Rs 12,000-15,000 crore in the next three years. The operator appears to have global ambitions as well, and soon it would seriously consider acquiring businesses abroad.

However, achieving these targets within the set time frame would be a tall order for BSNL. A case in point is its inability to meet the targets for capacity creation in broadband that has been hampered by delay in supply of equipment by vendors. Also, in the coming years, competition is likely to get tougher for the company. n

Next Page :

"Our major challenge is to manage the expansion and meet customer expectations"

Page(s)   1  2