Tuesday, August 2, 2011

BSNL Broadband

It was a bad year for BSNL as revenues came tumbling down by 10%. The company netted revenues of `28,877 crore in FY11 vis-a-vis `32,072 crore in FY10. The fall in revenues can be attributed to increased competition, capacity constraint, and decrease in quality of service.
The company has lost revenues both in fixed and mobile division whereas the company has gained revenues in broadband division. In fixedline, BSNL holds majority share of 72.6% and has a subscriber base of of 25.2 mn as on March 2011 as against 27.8 mn in March 2010, a decline of 9.36%.
In mobile, BSNL has added 22.3 mn lines in FY11 taking the overall tally to 91.8 mn lines. With respect to 3G, the service has been extended to 760 cities and all 117.06 mn mobile customers are experiencing 3G advantages. Presently, BSNL has around 1.5 mn 3G subscribers. The company is making efforts to popularize 3G services through 3G experience center on mobile vans, bundling handset and data card, and rationalizing tariffs by making it affordable, providing value added services to offer variety and provide increased reach to all target audience.
Broadband has done exceptionally well for BSNL as the company is present in 100% districts and 98% block headquarters. So, in toto the broadband coverage is available in more than 5,000 cities and 170,000 villages. The company has added 1.76 mn broadband lines in FY11. With respect to broadband, the company is providing IP-TV, games-on-demand, music-on-demand and tutor-on-demand services.
In broadband, BSNL has moved an extra mile. The company has provided broadband coverage to 60,000 CSCs (common service centers) pan India through ADSL 2+ and WiMax technologies. In Ministry of HRD project of National Mission for Education using ICT, BSNL has provided 1 Gbps connection to around 356 out of 400 universities pan India thereby creating a super highway for universities. The company has also provided 20 broadband VPN connections to around 11,500 colleges out of 18,000 colleges in last 18 months. In FY12, the company is planning to add 7.5 mn additional broadband connections of which 50% each will be wireless and wireline connections.
BSNL revenues have been declining from last 3 years and there seems to have been no course correction. The total revenue loss in the last 3 years has been to the tune of `6,290 crore which is a big loss for the company. To boost revenues, the company is betting heavily on enterprise and is planning to increase its revenue from `2,368 crore in FY11 to `3,500 crore in FY12.
To make this happen, the company has segmented customers on the basis of platinum, gold, and silver and are catering to the needs of each segment by opening platinum, gold, and silver offices across the country. For enterprise customers, the company is providing a single window coverage by joining hands with MTNL thereby providing pan-India coverage.
The company is on a revival mode and the focus is on cost reduction in each of the field units by identifying unproductive expenditure and capping it straightaway. Simultaneously, the maintenance divisions are critically reviewing systems and procedures to bring efficiency in the system.
Each circle has been directed to bring 10% reduction in opex by improving efficiency. Not only this, the company is looking at all possible additional sources of revenue, eg, renting out towers to other service providers, utilizing vacant space in buildings for telecom and IT related activities, and bandwidth leasing.
All this with improved 3G, mobile, and broadband services will help in bailing out the company from financial crisis in FY12.