State-run telecom operator BSNL’s financial performance continues to deteriorate but it can take some solace in being able to improve its record on the customer management front.
The company has managed to reverse customer attrition over the last 3-4 years, which it says is due to competitive plans and tariffs. Its market share has increased to 10.45% at the end of September this year from 8.65% in March 2015 and is targeting to take it to 12% by the next financial year.
Analysts, however, say that this improvement is more because of a number of private operators closing shop which has made subscribers port out to other operators and BSNL is also one of the beneficiaries.
Financially, things are not improving as BSNL is expected to report a loss of around Rs 8,000 crore for FY18, compared to Rs 4,786 crore in FY17. The board is expected to meet in the next few weeks to take stock of the financial numbers. It posted a loss of Rs 4,859 crore in FY16.
According to BSNL’s chairman and managing director Anupam Srivastava, the company has been focusing on improving the customer market share for the past few years and not laying too much emphasis on revenue. “If we focus too much on increasing revenues in such competitive times, we may end up losing both — the customers as well as revenues,” Srivastava told FE.
This, however, does not mean that BSNL will continue to incur losses forever. The telco feels that by next year when consolidation stabilizes, it will start improving financially.
As a result of the focus on customers, BSNL’s sales of new SIM cards has increased to 25.5 million in 2017-18 compared to 18.3 million in 2015-16. The company has also managed to reverse attrition of customers from its network. For the past three years, customers porting out from BSNL has been lower than customers porting-in. Even in 2018-19, despite the tough market conditions, the telco has managed to port-in almost as many subscribers as porting-out.
Ever since the entry of Reliance Jio in September 2016, most of the incumbent telecom operators have felt the impact on their subscriber base. However, big players like Bharti Airtel, Vodafone and Idea Cellular managed to retain their subscriber market share but growth was muted. Many others like Reliance Communications, Aircel, Telenor, Tata Teleservices, etc, either closed down or merged with bigger players.
Insiders at BSNL feel that employee costs are a big hurdle for the telco to return to profitability. Currently, almost 60% of the firm’s revenue goes into salary of staff, which is in sharp contrast to private players which pay around 10% of revenue as staff cost. However, things may improve in next three years when 35% of staff will retire. In order to check its staff costs, BSNL has now adopted an outsourcing model.
BSNL is also laying much emphasis on next generation technologies like 5G. The company has already partnered with Ericsson to develop 5G use cases, knowledge sharing on technology concepts and innovation trends, including 3GPP standardization progress.
“We intend to take the lead in the development of these new technologies. We will test, learn and develop use cases that will help us meet the diverse needs of our customers in the future. 5G will also help create the backbone on which Digital India initiatives will be delivered,” Srivastava said.
BSNL has also partnered Nokia for the development of 5G eco-system. – Financial Express