BSNL ready to give fight to private players with its 4G launch

State-run telecom player BSNL expects to emerge stronger with its soon to be launched 4G services which will come at a time when private players are moving towards next generation technology 5G.

Though its 4G services have been much delayed owing to various issues, the struggling PSU is confident of retaining its customer base and defending its turf. The start of 5G offerings by private operators will not place BSNL at an immediate disadvantage, as the device ecosystem for the new-age services is still evolving.

BSNL expects over Rs 17,000 crore revenue from services in FY22, a tad lower than the previous fiscal, mainly due to the removal of call connect charges that used to bring in additional inflows. However, BSNL’s losses stood at Rs 15,500 crore in 2019-20 and had halved to Rs 7,441 crore in 2020-21 and it expects to turn profitable by 2025-26.

On the other hand, BSNL has been losing out some of the prestigious government-funded digital connectivity programs to private sector rivals such as Bharti Airtel and Reliance Jio, and has sought telecom department’s intervention in line with Prime Minister Narendra Modi’s ambitious Atmanirbhar Bharat (self-reliant India) campaign.

BSNL continues to lose subscriber revenue following the non-availability of next generation network, and on the other hand losing out fully government-funded projects to private rivals.

The development comes close on the heels of the BSNL partnering with homegrown Tata Consultancy Services (TCS) and state-driven Centre for Development of Telematics (C-DoT) for the commercial rollout of fourth generation or 4G services together with a 5G-upgradable network.

According to Union Budget documents, the government will infuse Rs 44,720 crore into BSNL in the next financial year. The provision is made for capital infusion for the 4G spectrum, technology up-gradation and restructuring in the telecom PSU.

To strengthen the state-owned telecom corporations, the government had approved a revival plan for BSNL and MTNL in 2019.

Where the Cabinet approved Rs 70,000-crore revival for the financially stressed BSNL and Mahanagar Telephone Nigam Limited (MTNL) that included voluntary retirement scheme (VRS), assets monetisation and allocation of 4G airwaves, expecting the two to turn a corner.

The revival plan included measures to reduce the staff cost through a Voluntary Retirement Scheme (VRS), administrative allotment of spectrum for providing 4G services with funding through budgetary allocation, monetisation of non-core and core assets to generate resources to retire debt, meet capex and debt restructuring by raising of sovereign guarantee bonds.

A recent parliamentary panel report said the Department of Telecom (DoT) should consider carving out MTNL’s debt and assets worth over Rs 26,500 crore into a special purpose vehicle and then merge its operations with BSNL.

However, BSNL unions have opposed any plan of merger between BSNL and MTNL. The employees group have said that the proposed merger between the MTNL and BSNL would do irreparable damage to the Cabinet-approved revival plan for the latter.

The letter comes on the back of Centre’s plan to create synergies between the two loss-making entities, and further merge their operations making a single entity. MTNL is a listed firm, and has a wage disparity with BSNL employees.

In another development, Bharti Airtel, India’s second largest telecom operator is preparing to tap the metaverse opportunity with its upcoming 5G network and said that it will get into “deeper” partnerships with content providers and over-the-top players to enable several use cases.

5G will be enabling the metaverse, which requires a lot of data. Metaverse will need much higher speeds and need to be closer to the edge content. Telcos will play a major role. It could be used for sports events, gaming or even business meetings.

Though, telecom players have warned that consumers may see a sharp slowdown in the availability of latest 5G mobile phones with the government calling for mandatory local testing and certification of such devices from January 1, 2023, before they are sold in the country.

Operators have told the Department of Telecommunications (DoT) that such a move would hit data consumption, restrict market access and deprive consumers from buying the latest 5G phones. This scenario would be ironic, given that India’s top mobile carriers are readying to pump in top dollars in the upcoming 5G spectrum auctions, likely to be conducted around May-June, and roll out the next-gen wireless broadband networks later in FY23. Mac Pro Tricks